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A corporation is defamed if material is published about that corporation that would tend to negatively impact its standing in the business in which it operates. Although a company or corporation is not considered to have a reputation in the sense that an individual does, statements that would impact the public’s view of a company’s financial soundness or managerial integrity are generally considered defamatory to a company’s business reputation. A company or corporation may sue for defamation if such statements would tend to deter others from dealing with it.
A not-for-profit corporation may also sue for defamation if it relies on financial support from the public and published material would tend to harm that corporation’s ability to raise money from the general public.
Partnerships may be defamed in the same way as corporations—that is, published material that tends to negatively impact the partnership’s ability to do business. Just as a corporation, a partnership’s business reputation may be impacted by how the public views its financial soundness, managerial integrity and its ability to deliver goods and services.
Neither a partnership nor a corporation is necessarily defamed by statements directed against the individual partners or individual officers or stockholders. Defamatory statements may harm the individuals’ reputations and have no impact on the business, or they may harm the business’ reputation and have no impact on the individuals. Such defamatory statements may lead to separate causes of actions for the business and the individuals.
For a corporation or a partnership to bring a claim of defamation, the plaintiff must meet the same elements as are required in an individual defamation claim. These are:
The statement was published by the defendant, meaning it was spoken or distributed to at least one other person other than the plaintiff;
The statement provides enough information that the plaintiff is identifiable;
The statement harmed the plaintiff’s reputation in some way—in this case, the business reputation of the corporation or partnership.
Defenses of a defamation claim also are similar to those relative to an individual defamation claim. Truth is always an absolute defense, and even if a corporation or partnership suffers harm, if the statements are true, it may not collect damages.
If statements are false, but are expressed as an opinion, a defendant may have a defense. However, just as in an individual defamation claim, how the statements are presented and whether they would be understood to be an opinion by a reasonable person will be taken into consideration when determining if the statements are defamatory.
Corporations may sue for defamation if they can show that the published material has caused them or is likely to cause them financial loss. If the required elements exist, a corporate plaintiff may recover presumed damages. This means that harm is presumed—no proof is required—in the matter, and a fact finder may assess an amount he or she deems is appropriate. Brown & William Tobacco Corp. v. Jacobson, 827 F.2d 1119, 1139 (7th Cir. 1987); Dun & Bradstreet, Inc. v. Greenmoss Builders, Inc., 472 U.S. 749 (1985).
Corporations and partnerships may also pursue special damages in a defamation cause of action. In such a case, the corporation must show evidence of financial loss that stems directly from reputational injury that was caused by the defamatory material. These losses could include a decline in the value of the company’s stock.
The defamation tort as it applies to corporations and partnerships is complex and can ultimately involve multiple causes of action. The experienced internet defamation attorneys at Minc Law can help you determine how these laws apply to your case.
The Internet and the forms of electronic publishing and communication it facilitates have provided an economic boon to many businesses. Whereas decades ago the forms of marketing available were broad based and didn’t allow fine targeting of markets, this changed with the Internet revolution.
Today, companies and businesses can market broadly on general interest sites or extremely narrowly to focused niches on social media sites or based on user profiles on search engines like Google. Likewise, individuals the Internet has revolutionized communication for individuals by providing a global potential audience for all who participates.
However, despite the economic and communication benefits typically provided by the Internet, the web and its social media sites can also act as something of a double-edged sword. While businesses and marketers can spread their message easily, so can customers who have had a bad experience, fanboys and fangirls who are invested in a rival company’s ecosystem, and others who are simply looking to flame and attack the hard work you have invested into your product and services. Likewise, malicious individuals can use social media websites and platforms to slander and attack an individual for revenge or other reasons.
Thus, individuals and organizations ranging from small businesses to large corporations often want to know the actions they can take to protect themselves or their brand against baseless defamation. Furthermore, in instances where a false and defamatory review may have resulted in lost sales and decreased revenue, they may want to know whether the site and the poster can be held accountable for their actions.
In our culture the First Amendment holds a special and elevated place. As such, many people frequently argue that the First Amendment entitles them to say anything they want, how they want, and when they want regardless of the consequences. However, the courts have long-held that the First Amendment is subject to certain limits reflected in the famous aphorism, “You can’t yell fire in a crowded theater.” While this illustrates one limit on free speech, it does miss the point in some ways in that the text of the First Amendment reads:
Congress shall make no law … abridging the freedom of speech, or of the press; or the right of the people peaceably to assemble, and to petition the Government for a redress of grievances.
Thus, the First Amendment applies principally to government restraints on speech. While initially applying to only the federal government, the amendment was later incorporated through the 14th Amendment to also apply to the states. Thus, when people assert their First Amendment right to speak falsehoods publicly, they largely miss the point of the protections that are provided. Furthermore, they miss the court’s longstanding willingness to impose civil liability that has always applied to forms of defamatory speech like libel and slander.