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Business Litigation Alert: "Corporate Cyberbullying"

What to do when a business dispute goes viral

Corporate Counsel Magazine recently reported on a story that quickly caught my attention.  The article described the story of Old Hill Partners, an investment advisory firm in Connecticut, and its battle to take down false information posted online about the company and its CEO.  What started as one blog post filled with untrue, but damaging information, quickly morphed into multiple posts by several media outlets and, according to the article, ultimately led to the failure of the company’s planned $300 million investment fund. 

As Old Hill investigated, it learned that this had apparently been orchestrated by a disgruntled business associate over a distressed loan.  According to Corporate Counsel, he had paid a blogger to post the false information (which he told the blogger was true). After the posts continued, legitimate media outlets began to pick up this “news.”  Old Hill Partners quickly found out how difficult it is to have false information removed from the Internet, and the significant reputational damage even false information can inflict.

Unfortunately, what happened to Old Hill Partners could happen to any company without the right safeguards in place.  Those safeguards are critical to not only try to prevent this from happening, but also to effectively handle a similar situation.

  1. Monitor ALL News: First and foremost, companies must be vigilant in guarding their reputation, especially online where “news” can go viral in an instant.  This means consistently monitoring all news sources for any mention of your organization.  Using “Google Alerts” is one easy way to do this.
  2. Seek Expert Counsel: If you do find that false information is out there, it’s time to bring in the experts.  This is a new area of law, and the laws have not quite caught up with modern technology.  It can also be a very long, difficult process to remove information from the web once it’s been disseminated. As a result, having the right legal counsel in place with expertise in this developing area is very important. 
  3. React, and React Quickly: Once the first story or post “appears,” you must react.  Many business people will want to dismiss a false story as something that no one would believe.  Unfortunately, the lesson from Oak Hill Partners is that failing to respond in some form can be materially detrimental. 

A company’s reputation is everything, and once it is damaged, it can be very difficult to recover.  Putting safeguards in to place to protect your company from the proliferation of false information online can be the key to protecting that reputation from unnecessary damage.

The full article from Corporate Counsel Magazine can be found here.

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