On April 18, 2023, Fox News agreed to pay Dominion Voting Systems a staggering $787.5 million to settle a defamation lawsuit. Particularly startling about the settlement is that Dominion was valued at around $51 million as recently as 2018, meaning that the settlement resulted in a payout up to fifteen times Dominion’s value. Dominion filed the lawsuit in response to publicly broadcast statements by Fox News and its guests after the 2020 election. Dominion alleged that the statements were not only false, but that Fox News knew that the statements were false and repeatedly broadcast them anyway.

But what about the freedom of speech and freedom of the press? The First Amendment of the United States Constitution generally protects against infringements on the freedom of speech and of the press. However, the protection provided by the First Amendment has limits. For example, although the First Amendment generally protects statements of opinion, a person cannot state facts about another person or business that the person knows are false. Doing so risks liability for defamation.

“Content is king.” – Bill Gates, 1996.

The popularity of social media websites and apps continues to increase, and it has never been easier to create written or recorded content that could be read or viewed by hundreds, thousands, or even millions of people. Users can create and upload video or written content on their cell phones in a matter of seconds. If a person collects enough followers of their social media accounts, they can achieve the status of “influencer,” a term generally defined as a person who has gained an Internet following of a sufficient size to enable them to exert influence over social trends. In fact, many people gain an enormous Internet following not because they are movie stars, sports stars, or well-known politicians, but solely as a result of their online exploits. For example, one of the largest YouTube channels in the world is operated by an individual named Jimmy Donaldson, known better to his 146 million subscribers as “MrBeast.” The top-three most-followed TikTok accounts belong to Khabane Lame (156.5 million followers), Charli D’Amelio (150.5 million followers), and Bella Poarch (92.8 million followers). These huge followings enable influencers to make millions of dollars from companies that pay them to tout products to their followers.

Most social media users do not have anything remotely close to the following of these four individuals or the viewership of Fox News. However, the fact that Mr. Donaldson, Mr. Lame, Ms. D’Amelia, and Ms. Poarch are relatively unknown outside of context of the Internet, but wield a significant amount of influence inside that sphere, highlights the outsized influenced that social media provides to an average user or consumer. When used improperly, that outsized influence can lead to significant harm to anyone against whom it is directed.

For example, imagine you own a small to mid-sized business with a growing e-commerce component. One of your customers perceives that he suffered some slight (real or imagined) during an interaction with your company. Unbeknownst to you, he is one of the 4.5 billion people with a social media account, but has only 0.01 percent of the reach of Ms. Poarch (i.e., 9,300 followers). Fueled by outrage, the impression of anonymity, and the desire for revenge, the customer quickly tweets out a fake story about their interaction with you and your company in a matter of seconds, and goes on with his life. One of that customer’s followers retweets the story to his 10,000 followers, who share that story with their followers, and so on. Before it is over, your company’s business is devastated.

Under North Carolina law, such written statements can provide you, your company, or both with a cause of action for libel—defamation in written form. To succeed on a claim for libel, a claimant typically has to prove, at a minimum, that the speaker (a) published a false or defamatory statement about the claimant (b) to a third person and (c) as a result, injured the claimant’s reputation. The claimant must also prove that the speaker had met the level of conduct required under the law, which varies depending on whether the claimant is a public or private figure and whether the subject matter of the statements relates to public or private matters. The First Amendment tends to provide greater protections to speech regarding public officials and public matters. A higher burden of proof therefore typically applies to matters that involve public officials, public matters, or both. As a practical matter—and contrary to the dispute between Fox News and Dominion—most commercial defamation claims will involve private figures and statements made regarding private matters and are therefore provided no additional protection under the First Amendment.

Furthermore, if defamatory statements are plainly derogatory toward the claimant’s business, trade, or profession, the statements are actionable under a claim for libel per se. In Renwick v. News and Observer, a 1984 case decided by the North Carolina Supreme Court, the court summarized the standard that applies to a claim for libel per se:

When an unauthorized publication is libelous per se, malice and damage are presumed from the fact of publication and no proof is required as to any resulting injury. The law presumes that general damages actually, proximately and necessarily result from an unauthorized publication which is libelous per se and they are not required to be proved by evidence since they arise by inference of law, and are allowed whenever the immediate tendency of the publication is to impair plaintiff's reputation, although no actual pecuniary loss has in fact resulted.

In a defamation claim involving private figures and private matters, punitive damages are also available if the standard statutory requirements are met.
 
Defamatory statements can severely damage a business’s reputation. Dominion’s complaint alleged that Dominion would lose more than $600 million in profits between 2021 and 2029 as a result of Fox News’s statements, and had already lost millions of dollars of enterprise value at the time Dominion filed its complaint. But, Fox News’s size and the public attention dedicated to Fox News’s statements and the 2020 election generally render Dominion’s dispute with Fox News an outlier. For most businesses, a more common form of defamation will be contained in an Instagram post by a disgruntled customer or former employee, a Twitter tirade by someone who disagreed with a return policy, or some other type of social media post. With so much of the population having easy access to an audience for their frustrations, businesses without an active social media presence should consider establishing a process to periodically monitor social media posts for potentially defamatory statements. At a minimum, those businesses may be able to respond to the posts and mitigate any potentially harmful statements before they gain momentum. At the worst, businesses can identify users who make particularly harmful statements and take legal action to force them to put their money where their mouth is.