How will the System Graph court case impact social media?by
13th Jan 2011
What are the implications of System Graph taking a customer to court for complaining on the social web, and what can we learn? Gill Grassie, a partner and Head of IP & Technology Group with Maclay Murray & Spens LLP, explores.
Although it may be the first time a Greek business has sued a customer for criticism made online, the legal issues raised in the System Graph case, while interesting, are not new. If the case had been brought in the UK, the main issue would be whether the criticisms made online or not were true or, if not, whether they were defamatory.
If true, they would be legitimate and an exercise of the fundamental right of freedom of speech. If false, they may be defamatory and actionable. There is no reason to think that the Greek legal treatment of these issues would be any different. What is of more interest is how much more potentially damaging to businesses such remarks online can be, than if they are made in hard copy, given the popularity of social networking sites and the ease with which the message spreads in a viral way over the internet.
The big question for businesses is what policy or strategy to adopt to deal with this threat and whether to use any or all of the legal remedies available to resolve unfounded libellous complaints.
Dimitris Papadimitriadis ("DP") brought his Apple computer to System Graph, authorised service providers for Apple Inc in Greece. There were problems with his LCD monitor on the computer and System Graph agreed to repair the computer, recommending that the LCD monitor be cleaned. The computer was allegedly returned to DP in a worse condition than when originally given to System Graph to repair.
System Graph offered to repair the computer again, however, DP felt he had no further confidence in the company. It seems that DP relied on the Greek civil code to ask for a refund or replacement of the computer. The computer had not been purchased from System Graph and the company refused to agree to his request. Therefore, DP raised an action with the Greek consumer ombudsman (which is reported to be a long process)
In the meantime DP posted his story on an online forum. In response, System Graph has claimed that what DP has posted is damaging to its reputation and has sued him in the Greek courts for damages €200,000.
A number of interesting legal issues arise from this matter, which has captivated the attention of the blogosphere.
This case fundamentally involves the balance between freedom of expression on one hand and what might be considered defamation/libel in the UK. The main consideration has to be the extent to which the comments made on the forum by DP are true. The court will need to assess the evidence made available on the state of the computer before and after it was returned to DP. In the UK, courts would, among other things, seek to establish whether the statements made were true or not before determining the libel issue, i.e. whether or not there had been a detrimental impact on Systemgraph's reputation. Recent reports suggest that DP's comments were not particularly "harsh" and the reaction by Systemgraph and the sum claimed for in damages has attracted sympathy for DP from many in Greece and online communities.
From a PR perspective it seems clear that Systemgraph’s approach to this whole matter is in danger of backfiring. Time and again companies have had to bear the brunt of public backlash when they seek to target their own end customers in the courts. The ability for opposition to such action to be vocalised globally through, for example Facebook and Twitter, has heightened the negative press for companies that seek to attack customers in the courts to protect their reputations online. Many will regard this as an invasion of freedom of expression and the customer’s plight will be likely to attract sympathy amongst users of the internet generally and of social networking sites in particular.
Important lessons can be gleaned from this matter for all businesses. System Graph may have been better off to either ignore the claims made by DP online or to have responded in the same forums in a more measured way. The court action it has taken may well have resulted in worsening any damage already sustained to its reputation and its business. The global nature of the internet means that inevitably System Graph will be widely regarded as a company that sues its own customers - whether justified or not.
From a UK cultural perspective, it could put customers off dealing with them if they think that in the event they get what they believe is poor service they cannot complain about it for fear of being sued. Furthermore, Apple sets a high bar for companies operating under its authorised service provider programme and this episode may potentially give Apple cause to distance itself from Systemgraph.
It may be a no-win situation for businesses as, even if the case is successful, it could potentially attract scorn from online communities that regard such actions as impinging freedom of expression. That said, if the court were to decide the comments were entirely fallacious, based on the evidence, this should go some way to mitigate the damage. It could take a long time, though, to get to such a decision and all the while the damage has and continues to be done.
This is not to say that companies should allow a customer who may be trying to use social media to their advantage when it is not fair should pander to such pressure and it is clear that where false and disparaging comments are made that affect a company’s reputation, there should be recourse. The courts will always provide an avenue for this and have been willing to grant relief in cases where defamatory statements are made on or off line. But are there other ways to deal with this scenario?
If the court were to decide the statements were defamatory, System Graph could have been justified at an earlier stage in requesting that Twitter take them down from its site, which Twitter (or indeed any other social networking site or forum owner) would have been obliged to do if it wanted to avoid any liability for itself. That might have been a lower key way to try and deal with the issue but, clearly, might not have tackled it once or for all given the nature of the internet.
Also, System Graph may also have been better off to follow through or respond to a complaint with the Consumer Ombudsman. By raising an action in court the company gave cause for a reaction and the sum sued for seems to have exacerbated the discontent with System Graph. Might they also, as they may have done latterly, simply have noted online, as appropriate, that they always aim to provide excellent service, did not accept liability and would deal direct with the individual concerned to resolve the matter?
MyCustomer.com took a voxpop of opinions on the case - here are a selection of the opinions:
- "Freedom of speech is freedom of speech. If you feel you got bad service and can tell enough people about it, then do it. Right now, Twitter provides an asymmetric advantage to the disgruntled, because it is real-time, global and has more members than most countries. Taking this to court, rather than solving the problem one-to-one is possibly one of the most moronic courses of action since Steve Jobs retired. They used to say, do not pick fights with the press barons who buy ink by the barrowful – now it is anyone with a grievance and an iPad. As the Twitterati would say, for the marketing department, this is a FAIL." Paul Maher, director, positive marketing
- "Much recent research has shown that consumers are somewhat ‘privacy blind’ on social networking sites, not feeling that their contribution is as public as it often is and rarely feeling exposed. If this new case results in the customer being successfully sued over their online complaint, it poses a question about their vulnerability in a format that may seem to the consumer as a modern day equivalent of a conversation between friends – this may herald the start of new phase in the lifecycle of social media making consumers much more wary of their online comments than they have been in the past. The risk is that this case will spark a change in how consumers share their thoughts and opinions via social media and as a result could backfire for businesses, who will lose out on opportunities to engage with their customers, at particularly critical moments and through a medium which has an almost uniquely powerful effect on encouraging consumers to openly share their feelings, experiences - and frustrations." Amy Hawthorn, project director, Sundance.
- "If System Graph is successful in its court action there could be serious repercussions for Twitter. The Chambers case has probably made most of us a little more wary about the language we use in our tweets. Adding to Twitter’s troubles, there is now a looming threat from the Newspaper Licensing Authority to enforce its copyright over links to online articles. If Dr Papadimitriadis were to suffer a 200,000 euro fine for moaning about his supplier, we could soon find Twitter populated only with reports of what people had for breakfast." Xanthe Vaughan Williams, director, Fourth Day PR
- "Let’s be clear, it is highly unlikely that System Graph will win the case. But if by some miracle they do it will not have any impact of how customer service is managed by reputable companies. If used properly social media provides a powerful tool for delivering great customer service. But whatever the communications channel suing your customer could never be described as best practice." Matt Lynch, partner, Insight Exchange
- "Dimitris obviously felt he wasn’t receiving the support he expected from the System Graph and so, like millions of other internet users, he took to the only medium in which consumers appear to have a voice – the internet. He is not the first to air negative feedback online, nor will he be the last and System Graph has made a fundamental error in taking legal action against him. As the story has gained momentum it has prompted individuals to form a negative opinion on a company they hadn’t previously heard of – and has become a case study of how not to deal with online complaints. I don’t anticipate that this case will have a negative impact on the way in which consumers voice complaints online, I think the only change will be how businesses choose to engage with these complaints; a welcome change for many consumers." Bob Pike, COO, SITEFORUM
- “It seems madness that System Graph should take this action, and I don't believe other companies will follow suit." Tamara Littleton, CEO, eModeration
- "Trying to suppress a customer complaint through the courts is ludicrously heavy-handed and simply draws attention to the complaint. Consumers will not tolerate this type of oppressive behaviour." Richard Ilsley, founder, Synogis
Neil Davey was previously the editor of MyCustomer from 2007 until May 2023. An experienced business journalist and editor, Neil has worked on a variety of newspapers, magazines and websites over the past 20 years, including Internet Works, CXO magazine and Business Management.
Read more from Neil Davey
Please login or register to join the discussion.
This certainly is not good for the business. Consider this, on one hand business speaks about being customer-centric and building brands, how they will be able to even speak in this language if by any chance the case is won.
I believe this only shows that SystemGraph is not good at its job. Please learn the new tricks in order to sustain
-- Regards, Nishith Gupta http://twitter.com/nishith_gupta
Social media allows the general public to do that which they would on the street, in the pub, in a taxi, with friends, with strangers, family and partners. It is a platform by which discussions can be had and varying perspectives and viewpoints overlaid. Freedom of speech is a right of every individual. If the content of what an individual writes or says is disagreeable to the viewer or individual that is the subject of said prose then a connection between them should be made. A move toward speaking to the host site, Twitter, Facebook, LinkedIn, whoever has hosted the post and look to remove it. To publicly drag the question of whether social media can or should be allowed to operate in this fashion is to question the existence of it in its totality. I agree that it is a shame that it has been taken to this extent and as my fellow posters mentioned a company that many may not have heard of is getting a very negative wrap.
The key to and Social Media use is complete transparency, regular communication and open mindedness. Without this there is only mis-communicaiton, lack of engagement (which leads to lack of interest both inward and outward) and mis-trust.
My opinion is that of my own and not necessarily the company that which I am affiliated. We provide social media solutions for companies, do's, dont's and other information that may be of interest to readers, check out the link below,
I wonder how many prolific bloggers know that they run the risk of being sued if they post unfounded negative comments online. You would assume that common sense would tell them not to do this but I would argue many believe the internet is free space to say anything you like with no repercussions. However do you really want to be the business that sues a customer - that's going to look great in the press.