22 October 2019

Making false statements online about commercial rivals


The High Court has recently shown that it is prepared to intervene in cases where allegations are published in bad faith on social media about commercial rivals. This is a welcome decision for companies, charities, and influencers who find themselves the target of tactical comparative advertising which goes too far (such as false claims on the safety or quality of a product or service), or where such claims are made maliciously by a commercial rival in the context of promoting their own competing product or service.

In this case, the designer of a rival product posted 84 videos on YouTube in which he suggested that the claimant’s own product was dangerous and that the claimant had made false claims about its product’s efficacy. In trying to defend his statements, the defendant argued that his competitor could not show that its product was 100% effective. However, the defendant did not appear to recognise that his YouTube allegations had gone much further than that, and in fact the claimant had never exaggerated what it said about its own product’s efficacy. Even if it were true that the product was not 100% effective in its operation, this did not make it unsafe nor make the claimant dishonest in its marketing.

The Court held that competitor’s specific purpose in publishing the statements was to put off the claimants’ potential customers, and it was self-evidently likely that the managing director had suffered pecuniary loss by way of loss of sales as a result of the YouTube videos. On the evidence before it, the Court concluded that there was no real prospect that any other conclusion would be reached if the matter went to trial and so was prepared to find in the claimants’ favour and enter summary judgment.

Chloe Flascher, associate in Withers’ media and reputation team, said: ‘It is understandable that a founder or director might think that its competitor’s product is not as good as their own, but when commenting on a rival product it is important to check that any criticisms made can be backed up with evidence and that any statements are scripted and checked. In today’s social media centric world, commercial rankism is heightened and can all too often perpetuate itself in damaging forms. If untrue statements are putting off potential customers then that amounts to a legal claim.’

For more information, please contact one of the media and reputation team.

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