Dealing with Defamation of Your Business: Can You Sue?

What is Defamation?

In legal terms, a false statement of fact made to harm the reputation of someone else, and made either negligently or maliciously, constitutes defamation.

Defamation can either be written or oral:

In Singapore, defamation can give rise to criminal or civil actions. It is a criminal offence section 499 of the Penal Code. The Defamation Act regulates civil actions based on the tort of defamation.

Depending on the severity and nature of the offence, parties alleged to have committed defamation can be charged in court under either the Penal Code or the Defamation Act.

Under the Penal Code, defamation is regarded as a criminal offence and you could be sentenced to prison if found guilty.

Under the Defamation Act, defamation is regarded as a civil offence instead, and possible remedies include compensation to the victim and injunctions (i.e. banning the offender from posting again).

Legal Defences To Defamation

Under common law in Singapore, there are 2 primary defences to defamation, for those defined as without privilege. They are namely the defence of justification, and the defence of fair comment.

In summary, for a defence of justification, the defendant (person who is accused of making the defamatory remark) bears the burden of proof to show that the statement that he/she made was true.

For defence of fair comment, the defendant must prove that the statement was a matter of genuine opinion.

How Defamation Relates to Business Owners

Business owners, especially those running online businesses, are also affected by defamation. Unlike in cases where defamation is made against a person, defamation is directed at the business instead.

For example, if you operate an online business, defamation could take place through online reviews about your business and the services it provides/products it sells. This can happen when dissatisfied customers write up negative online reviews about your business on crowd-sourced review platforms such as TripAdvisor or Yelp. As a business owner, such remarks are defamatory if they are deemed to be untrue and made with the intent of harming your business’ reputation.

For example, in March 2024, a TikTok user who goes by the moniker Gunbuttock left a “brutally honest” review of a Kampong Glam Ramadan Bazaar food stall. He received a cease-and-desist letter from the business owner’s lawyer, claiming the review was defamatory and posed “a major threat” to the stall’s reputation.

Another example would be marketing tactics from competitors to deliberately undermine your business through negative advertising campaigns. Competitors can choose to do this by deliberately targeting your business and asserting their superiority over your products or services.

A case in point: in August 2024, purifier company Sterra apologised for making false and misleading claims about its air and water purifiers, as well as the quality of Singapore’s tap water. Complaints were made about an online advertisement by Sterra back in February, which falsely claimed that Singapore’s tap water was unsafe for direct consumption without being filtered by Sterra’s water purifiers. Two complaints came from the public and another from Singapore’s national water agency PUB. Arguably, Sterra’s statements were not only misleading, but could potentially be deemed defamatory.

In more extreme cases, your business can also be sued for defamation if statements made during advertising campaigns are made negligently and deemed to be defamatory. Hence, it is important to understand defamation in the context of your business, and how such cases can be avoided or managed.

Responding to Defamation of Your Business

Effective management of the situation is crucial for your business. Here are some approaches in which you can respond to defamatory remarks about your business and uphold your business’ integrity:

1. Do not be hasty in removing hate remarks

The first step to bear in mind is that the removal (even immediate) of such defamatory remarks may not be the best solution to the problem. Always bear in mind that on third-party, crowd-sourced review platforms, reviewers are free to share their opinions or experiences, as long as they comply with the websites’ rules.

Having the comment taken down or demanding the third-party provider to do so could potentially make matters worse. Your business will appear overly-defensive and aggressive, and give an impression of being incapable of dealing with criticism.

In 2020, a local interior design company filed a suit against a married couple who took to Google reviews to express their dissatisfaction with the renovation work at their new apartment. The suit was initially dismissed on the grounds of insufficient evidence. However, the firm later announced that the High Court reversed the decision, ruling that the company had, in fact, been defamed by its ex-clients in the Google reviews.

It is not as straightforward as merely having a bad review taken down. Unless the remarks are of a threatening or abusive nature, you should take this into consideration before deciding to insist that the reviews be taken down. This helps you to avoid unnecessary or longstanding legal action.

2. Respond graciously

One approach which business owners can take is in the form of a targeted and gracious response to the maker of the defamatory remarks online. This approach allows you to acknowledge your business’ shortcomings (if there were any) and seek to restore customer confidence. This must also be balanced with maintaining the dignity and integrity of your business.

For example, if a business receives negative feedback, it is important to respond promptly and empathetically, acknowledging the review within 24 hours at least. This demonstrates that the business values their customers’ input and feedback.

Any apology should also be sincere in its tone, with the business taking responsibility for any errors or unpleasant experiences. In more serious cases, they can even consider privately contacting the customer and undertaking a private, internal investigation.

Businesses can also look to offering tangible solutions, such as discounts, replacements or extended services, which can demonstrate a genuine attempt to resolve the issue.

As a business owner, you can even see the lighter side of things and adopt a more light-hearted, humorous yet respectful approach in response to defamatory remarks about your business. At the same time, do not be afraid to present your side of the story. For example, see how these business owners responded to bad reviews about them on Yelp.

3. Seek legal advice

If these defamatory remarks have been truly damaging to your business’ reputation, such as a prolonged drop in sales and earnings or loss of customers, you can then turn to litigation to address the issue. It is usually recommended as a last resort due to the amount of resources that could be drained from your business. Depending on the severity of the remarks, it may be a criminal or civil proceeding.

For you to prove that the remarks made were indeed defamatory to your business, you will have to ensure that the statement(s) made fulfils 3 criteria:

1. The statement(s) must be defamatory in nature, i.e. intended to harm your business’ reputation or expose your business to contempt or ridicule.
2. The statement(s) must refer to your business, either by stating its name or referencing it through other means, e.g. a picture.
3. The statement(s) about your business must be published and communicated to a third party.

Once you can successfully prove that the statement(s) were indeed defamatory, you can proceed to seek compensation in the form of damages or injunctions in court. For more serious cases, the defendant (maker of the defamatory remarks) could face imprisonment if found guilty.

Do bear in mind that you are unable to seek legal action against the network service providers, e.g. TripAdvisor or Facebook, provided that they have not altered the defamatory statements in question.

This is because they are protected under section 26 of the Electronic Transactions Act which states that they are not subjected to any civil or criminal liability that arises when such content is posted, they are merely providing access to such statements.

SingaporeLegalAdvice provides a platform for you to contact defamation lawyers and seek a suitable recourse for your business in the event of alleged defamation.

Dealing with Defamation

As a business owner, especially if you run an online business, your business will always be subjected to criticism and reviews from customers. It is important to manage such remarks carefully and not jump into a defamation suit. However, in some cases litigation might be the last resort to ensure that your business’ integrity is not compromised.

Careful management of how your business responds to defamation will ensure that its reputation will not be compromised in the long term.