By Jim Middlemiss

The Web is all about empowerment and self-expression, but those powers are not always used for good. Anyone with a perceived gripe can employ the worldwide network as an incredibly efficient and damaging smear mechanism.

So when a disgruntled British Columbia mining executive engaged in a cyber smear campaign attacking Barrick Gold Corp. through online bulletin boards, Web sites and chat rooms, the mining giant fought back in the courts.

It sued Jorge Lopehandia and Chile Mineral Fields Canada Ltd. claiming Lopehandia engaged in a “systematic, extensive and vicious campaign of libel…
over an extraordinarily lengthy period.”

Ontario’s Court of Appeal agreed last spring, upping a lower court award and granting Barrick $75,000 in general damages for libel and a further $50,000 in punitive damages — an inordinately high amount for a Canadian court.

In an equally unusual move, Ontario’s highest court awarded a permanent injunction that prevents Lopehandia from “disseminating, posting on the Internet
or publishing in any manner whatsoever” any further defamatory statements.

Barrick is not alone in facing online smear campaigns. More and more Canadian companies are victims of cyber besmirching and their reputations are being raked over the online coals.

While the Internet has revolutionized business by improving communication, opening the doors to new forms of commerce, increasing employee productivity
and creating a networked community, it also has a powerful dark side.

It creates opportunities for disgruntled former employees, customers or business competitors to use cyberspace as a means of attack, destroying hard fought-for reputations and maliciously spreading falsehoods.

And it’s effective. After all, the Internet is the world’s biggest publication, with the potential to reach millions of people worldwide.

As noted by Justice R.A. Blair in the Barrick case: “The Internet represents a communications revolution…It is a medium which does not respect geographical boundaries. Concomitant with the utopian possibility of creating virtual communities, enabling aspects of identity to be explored,
and heralding a new and global age of free speech and democracy, the Internet is also potentially a medium of virtually limitless international defamation.”

Fighting back David F. Sutherland, a Vancouver-based defamation lawyer, said “I think the cyber-libel problem is really serious. Once something is posted on an Internet site, it ends up echoing around really forever.”

For example, Google reports it now searches 4.2 billion Web pages. Once a libel hits the Internet, it can get picked up in searches and stored on multiple servers all over the world. Who knows where it will end up and who will see it?

Battling cyber libel “is an entirely different form of warfare” from traditional media, said David Potts, a Toronto libel lawyer. Fighting libel in the traditional media, he said, can be compared to warring factions in the 18th century. “You lined up against each other and there were certain rules of war and they were abided by.” That contrasts to the Internet, which he likened to guerrilla warfare. “There are no rules and no particular rules of conduct.”

For example, bulletin board attackers are often anonymous, using multiple fake names. It can be difficult to track them down and, depending on where they’re located, to stop them.

Three smears
Cyber smears exist in different forms, said Michael Crawford, a lawyer and author of The Journalists’ Legal Guide.

First are the direct attacks, such as an e-mail campaign that slags a specific person. Then there are the attacks that can take place on a more public forum, such as the bulletin boards of chat rooms.

Publicly traded companies are particularly vulnerable to chat-room attacks, because short sellers may try to raise fears about a company in the hope that people will dump their shares so the sellers can close positions at a handsome profit.

But it’s not just bulletin boards and emails that are problematic. Crawford said there are a growing number of gripe sites where irate consumers and disgruntled or former employees can air dirty laundry.

These sites often use a corporate name with “sucks.com” added after it. The sites vent grievances with a specific company or a manufacturer’s brands.

Gripe sites are becoming so prevalent they now have their own Web site: http://www.Webgripesites.com.

Crawford, who runs a marketing communications business, said one of the latest areas for concern is Web logs, also known as blogs.

One of his clients was preparing to expand his business into another province and had been training staff. He Googled the company’s name and came across a blog by one of the newly hired staff who had made disparaging remarks about the trainers.

Crawford pointed out the blog to company officials. “The courts have definitely taken the line that just because it’s on the Internet, [content] doesn’t enjoy any greater rights of free speech than it would if it was in a printed publication or if you were standing on a corner on a busy street.

The same rules apply.”

From a corporation’s standpoint that’s good because Canada has the “most underdeveloped, shall we say plaintiff-friendly, libel laws,” said Brian MacLeod Rogers, a Toronto media law lawyer, who added it’s not as advantageous for persons making the comment.

Randy Pepper, a litigator at Osler Hoskin & Harcourt, said that “business owners have a bit more protection here than they do in the United States.”

Advice for Action
Defamers face more restrictions in justifying their actions when it comes to libel and the onus is on them to prove statements are defensible. More importantly, Canadian Internet service providers can be held liable if they don’t act when notified of defamatory statements posted on Web sites they host. That contrasts to the U.S., where the law has specific protections for ISPs.

Pepper once obtained an order from a court requiring an ISP to disclose the name of a person who e-mailed disparaging comments about George Irwin,
then president of Irwin Toys Ltd., to 70 of his staff, along with confidential company files. The sender’s e-mail address was an alias, so Pepper went to court to force the ISP to disclose who was behind the attacks.

The ISP is the best place to start if a firm is a victim of a cyber smear, according to lawyers. The firm can be asked to remove comments from chat rooms or take down rogue Web sites. “From the ISP standpoint, they don’t want to get into editing these postings,” Pepper said. “So it’s easier to remove them.”

In the case of gripe sites that use a company name, businesses can also approach ICANN, the organization responsible for maintaining Web addresses. It has an arbitration system that firms can utilize to shut down Web addresses for bad faith claims and turn them over to the company. However, it’s hit and miss. Sometimes arbitrators shut down the sucks.com sites and sometimes they don’t, citing freedom of expression.

As well, many times the gripe sites’ owners will post a corporation’s logo or trademark, which opens the door to a firm seeking redress under intellectual property laws, Sutherland said, where courts will readily grant injunctions for improper use of protected marks.

However, Crawford said that just because people don’t like critical comments made about them or their businesses on the Web, that’s not the same as proving defamation. Comments may be fair. If a consumer is posting comments about bad service at a store or how a product doesn’t work, it’s no slam-dunk that the comments are libelous. However, questioning a person’s honesty or capabilities is still disallowed.

Sutherland said a firm facing criticism for products may have an action for slander of goods, but you have to show special damages, which can be difficult to prove.

So what should companies do if they are victims of a cyber smear? First off, they need to keep an eye on what people are saying about them online.

Crawford said that some public relations firms engage in reputation management and will gauge Internet activity. As well, “some clipping services will not only troll publications, but check Web sites and Web logs.”

Law firms can also help firms monitor the use of their trademarks and act quickly if they’re improperly used.

Crawford said Web search engine Google also has an alert service that will scan the Web for certain terms and advise you when they appear.

But when it comes to a cyber smear campaign, Sutherland said, “it’s a challenge to devise an antidote. In practical terms, nobody really wants to run two to three years of expensive litigation.” That is, however, how long it can take to deal with the situation.