How Does Defamation Apply to Marketplaces?

Summarise with: ChatGPT Claude Perplexity Microsoft Copilot

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Table of Contents

• What is Defamation?
• Can a Marketplace Operator be Held Responsible for Defamation of a User?
• How Can a Marketplace Operator Prevent Defamation Claim?
• Key Takeaways
• Frequently Asked Questions

Online marketplaces are platforms that link buyers and sellers with particular products or services. Some well-known examples of widely used marketplaces include eBay, Uber and Airbnb. However, they are also increasingly becoming utilised to set up small businesses, such as a marketplace for a cleaning, tutoring agency or a marketplace that sells different brands of beauty products. Many online marketplaces provide users with a platform to leave reviews, discuss issues, ask questions and seek advice from other users. This feature can allow your users to generate a sense of community on your marketplace platform. However, you must understand that if someone posts something defamatory on your marketplace, you may be held legally responsible for the defamatory post. If you operate an online marketplace, it is important to understand how a defamation claim could be made against you. This article outlines: 

• the elements of defamation; and
• how marketplace operators can protect themselves from a potential claim. 

What is Defamation?

Defamation is the publication of communication that clearly identifies a person or small business and that damages that person or small business’ reputation. To prove that the online post is defamatory, the person must show that the online post is false and negatively affects them or their business’ reputation. Therefore, the elements that need to be established for an online defamation claim include that the online post:

1. was published and made available to another person or to the public;
2. clearly identifies the person or business; and
3. is, in fact, defamatory, meaning that it damaged the person or business’ reputation.

Can a Marketplace Operator be Held Responsible for Defamation of a User?

You may not have typed the post yourself. However, if one of your marketplace users posts something defamatory on your marketplace, you could still be considered a ‘publisher’ of the defamatory post. Essentially, if you are ‘hosting’ the defamatory online post, you could be held responsible for it. This is because you may be considered the ‘publisher’ of the defamatory post in the eyes of the court.

In the recent case of Voller v Nationwide News Pty Ltd and others [2019] NSWSC 766, the Supreme Court of NSW held that news organisations such as the publishers of the Sydney Morning Herald and The Australian should be held responsible for the comments posted by Facebook users on their respective Facebook pages. The court found that because the news organisations which operated the Facebook pages had the ability to monitor and hide comments, they should accept responsibility for the comments made by other Facebook users.

Outlined below are some other ways in which you can prevent someone from making a defamation claim against you due to a defamatory post on your marketplace platform. 

How Can a Marketplace Operator Prevent Defamation Claim?

As a marketplace operator, you must take steps to reduce the likelihood of users posting defamatory content on your platform. This includes content in reviews and forums.

Terms and Conditions

You should ensure that you have a comprehensively drafted set of terms and conditions. Additionally, you should require the user to read and click to accept the terms. If possible, record their acceptance should you need to prove this later.

The terms and conditions should state that a user warrants or promises not to post material that is defamatory to your marketplace, including any review or forum. Further, each user should warrant that any comment or review is true and is an opinion they honestly hold.

Limit Reviewers 

It is important to set up the marketplace so that only people or businesses who have actually purchased a user’s products or services can post a review. This helps ensure that any review is true and is an opinion that they honestly hold. Both of which are defences for defamation.

Report Post Buttons

Give your users the ability to report defamatory comments on reviews or forums. That way, your users can assist in detecting problematic comments, including those which may contain defamatory statements.

Be Proactive

Make sure you have an employee responsible for managing online posts by users on your marketplace. They should be actively monitoring for any infringing posts. Suppose they make you aware of any posts or comments on your marketplace platform which could be defamatory. In that case, you should delete them promptly. 

Key Takeaways

Many online marketplaces include the ability for users to leave online reviews and post comments. People who control and maintain online platforms and pages can be held responsible for defamatory comments posted on their online platforms and pages. This is despite not being the one who posted them. You can try to prevent someone from making a defamation claim against you as the marketplace operator. Be proactive in protecting your business by taking the following steps:

• have a robust set of terms and conditions in place. These should warrant that user’s statements are true or an honest opinion, prohibit them from posting defamatory comments and give you the right to delete defamatory comments;
• include a simple way for users to report defamatory posts; and
• delete defamatory posts promptly.
  

If you have concerns about any communication that could be defamatory, contact LegalVision’s disputes resolution lawyers on 1300 544 755 or fill out the form on this page.

Frequently Asked Questions