Journal of Information, Law and Technology Cybersmearing: a legal Conflict Between Individuals and Corporations

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1. Introduction

With the introduction and rapid evolution of the Internet, users have been provided an elective, often anonymous, electronic platform to globally communicate their ideas, beliefs, and commentary, whether factual or not (Sobel, 2000). The perceived anonymity of the Internet enables many users to publish messages that they otherwise might not have sent were attribution to them readily feasible (Pizzi, 2001). As the US Supreme Court explained in Reno v. American Civil Liberties Union, 521 US844, 870 (1997):
‘through the use of chat rooms, any person with a phone line can become a town crier with a voice that resonates farther than it could from any soap box,’
with the afterthought being that the ‘town crier’ can remain virtually anonymous, at will. Nevertheless, with the advent of diverse forms of increasingly sophisticated electronic technology anonymity is more an illusion than a reality as anonymous message posters have come to realize that they leave behind electronic ‘fingerprints’ each time that they send a message (Bell, 1999). With the assistance and cooperation of Internet Service Providers (ISP's) or web-site owners, the identity of a message poster can be traced to the source computer thereby vaporizing any notion of perceived anonymity. Initially, corporations that believed themselves to have been unfairly attacked in the electronic mail medium sued ISPs claiming liability damages for having provided the mechanical platform that facilitated the distribution of allegedly defamatory information. ISPs quickly reacted arguing that they had no control over the unilateral actions of their users; and, hence, should be accorded no less legal liability protection than that enjoyed by telephone companies. The US Congress supported this position when it enacted the Communications Decency Privacy Act of 19961 to immunize ISPs from most defamatory liabilities2.
The act of communicating a false, disparaging, or defamatory remark about a company, its management or stock, on the Internet has come to be referred to as ‘cybersmearing’ (Buckingham and Rubin, 2001). Although the term has yet to be defined by a court, it has become somewhat expansive in use, including its reference as descriptive of the process through which corporations suffer damages when a poster defames or disparages it on the Internet (Goldhaber, 2000).
Cybersmearing has caused the United States judicial system to discuss various theories and methodologies on how to balance a number of contrasting views including: the public's Constitutionally guaranteed First Amendment right to free speech and the amorphous notion of ‘privacy’ versus the corporation’s right to protect itself from disparagement and the unauthorized distribution of proprietary information. During the last three years, cybersmearing has significantly impacted the economic conditions of hundreds of companies and thus, has resulted in a multitude of federal and state3 court cases4.
The first part of this paper provides a discussion of the legal issues and history surrounding cybersmearing. The second section describes key federal and state court decisions that are evolving as the foundation for cybersmear litigation. The last section provides a summary of current and evolving trends in cybersmearing cases.

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