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Libelous bloggers cost company $100m

Oracle News by Burleson Consulting

This CBS News bad blogger article notes that anonymous bloggers can be very dangerous, often costing innocent companies hundreds of millions of dollars by publishing lies on the internet.  While many states have crimes of tortuous interference with business relationships laws, many of the criminals have limited assets, and police are not able to arrest geographically distributed and unknown attackers.  This attack cost a victim 100 million dollars:

"His company was preparing to launch a new product, a no-calorie fat substitute called Z-trim, when anonymous bloggers went on the attack.

"We started getting people that were putting up web-sites, and - chatting on chat boards and blogs, and saying all sorts of information that we knew to be completely false," laments Helpern.

"They were saying things like, 'The product isn't good for you,' or, you know, 'It'll give you a stomach ache.'"

Halpern says he was the victim of stockmarket manipulators who stood to profit by driving down his stock price.

"We went on it first naively, saying, 'Let's go explain to these people saying this stuff.' And then they - they just kept twisting whatever we said more and more. And then we said, 'Oh, OK. So it's a fire-with-fire mentality.' So then we fought 'em," says Halpern.

After months of legal struggles, Halpern unmasked his attacker and got the blog shut down. But it wasn't an entirely happy ending, the company stock had plunged.

"The cost in monetary terms was probably well over $100 million at one point, of loss to equity value," explains Halpern.

But isn't the Internet all about free speech?

"We're all for free speech. It's what allows us to go tell you our story. And we're very excited about that. But somebody's gonna have to, at some point, act responsibly about managing the free speech, cuz free speech doesn't mean libel," says Halpern."

For more details on tortuous interference crimes, see:


 

 

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