June 11, 1998
Internet insults create 'slippery slope' for firms
By Janet McFarland
The Globe and Mail
Companies that become targets of Internet insults should tread
carefully if they want to fight chat group mudslinging, crisis
management experts say.
A vigorous response can bring far more attention to the comments
than they would otherwise receive, and add credibility to claims that
many people had previously dismissed.
Corporate relations consultant Richard Wertheim said companies
risk being drawn into a pattern of responding to Internet chatter
once they start to get involved.
"My first preference would be not to respond at all. It's a slippery
slope, and it becomes a very difficult decision as to what you
respond to or not. If you made a practice or precedent of
responding and suddenly you don't, are you then approving it?
There are some very grey areas.
In a recent case, Philip Services Corp. posted a strong
condemnation of a group of anonymous critics who were putting
potentially libellous criticisms of the company on a message board
run by search engine provider Yahoo Inc.
In its own Internet commentary on the Yahoo site, Philip said it
"does not object to fair and objective criticism," but it was forced to
act because the message board had become "a vehicle for
slandering and misrepresenting employees and the affairs of the
company."
The scrap metal firm, based in Hamilton, said it is trying to discover
the identities of the anonymous writers to take action against them.
Philip also appeared to confirm that at least some of the information
has been accurate, noting a few people appear to be disclosing
confidential insider information about the company on the site,
contrary to securities law.
Toronto consultant Patrick McGee, who specializes in crisis
management and public relations, said companies have a range of
options to respond to comments on the Internet, but they have to
weigh them carefully for their impact.
The biggest concern, he explained is making the problem worse by
introducing it to a broader audience.
"By going public, they (Philip) have raised this now, both in terms of
the number of people who are aware of it and by giving it credibility
just be acknowledging it."
It would be better, he argued, to spend time responding to phone
calls from investors, analysts or reporters who have seen the
allegations and want to know whether they are true.
"My view would be that if you can't shut this type of discussion off
without making a big deal of it, then be extra diligent and extra
responsive when you get calls about it."
Mr. McGee said it is easier when the identity of the writer is known.
In those cases, the company can send a letter directly to the writer
or commence legal action if the comments are libelous.
The Toronto Stock Exchange recently sent a letter to options
trader Porter Davis, threatening to begin a libel action unless
he stopped criticizing the exchange on the Internet. Mr. Porter
went public with the letter, accusing the TSE of trying to
intimidate a critic, but he has stopped posting comments.
Mr. McGee said companies and organizations such as the TSE have
to weigh whether the publicity is acceptable in order to shut down
the source of untrue comments.
"From a company's point of view, it may be worth taking that hit
because you're going to stop this ongoing criticism."
But there are practical problems that can stop companies from
taking legal action when the source of comments is anonymous.
Under a law passed by the U.S. Congress last year, an Internet
company is not responsible for libelous comments posted by others
on their sites.
Most on-line businesses say they will only disclose the names of
customers when forced to do so by a court order, which rarely
occurs.
Public relations experts say a better option may be for a company to
simply monitor the comments to be aware of what is being said.
A recent survey by Mr. Wertheim's Toronto-based public relations
firm, Wertheim + Co. Inc. found that many organizations monitor
chat rooms, but fewer participate in the discussion.
For example, 14 companies said they monitor chat groups, while 25
said they do not and six were unsure. But only 10 said they would
participate in discussions, compared with 25 that would not and 27
that indicated they did not know.
Companies revealed that they would more likely get involved to
correct factual errors than to respond to an allegation or rumour.
Jacob Bogatin, chief executive officer of scandal-plagued YBM
Magnex International Inc. backed away from the Internet after a
recent attempt to respond to criticisms and rumours.
He posted a statement on The Silicon Investor chat group saying
on-line barbs have been very damaging to the company's
shareholders and that they were not true.
The posting was met with a flurry of questions seeking information
about a raid on YBM's U.S. offices on May 13 by the FBI in
connection with a criminal investigation.
One poster noted the Newtown, Pa.-based company has kept
investors in the dark and said Mr. Bogatin should not blame a
private securities investigation for bringing information to investors
through the Internet.
Mr. Bogatin did not respond again.
Mr. McGee said firms should never level criticisms at people who
are more believable than the company.
"If you don't have a lot of credibility and you take something like
that on, the question becomes who is the most credible and who are
people most likely to listen to."
MM:-) |
