United States: The Hidden Dangers of Chat Rooms

Advocates of company-operated chat rooms and similar services state that chat rooms are good places for customers to obtain and to share information concerning a company and its products and services. While there are advantages to operating a chat room, operating a chat room can also expose one to many different types of potential liability.

One such type of liability involves defamation. Prior to the enactment of the Communications Decency Act of 1996 ("CDA"), courts had struggled with issues relating to the potential liability of bulletin board operators, chat room operators and Internet Service Providers (collectively, "ISPs") for allegedly defamatory statements posted by third parties. A provision of the CDA know as the "Good Samaritan Provision" has been broadly interpreted to prevent civil actions against ISPs where such ISPs were simply publishers of material posted on a network by some third party.

Chat room operators should note, however, that the CDA's protections apply only to information provided by third parties. Hence, information provided by a company's employees and possibly agents of the company could still provide grounds for liability.

In addition to possible defamation claims, chat room operators may face a host of other legal problems, including alleged securities violations if, for example, a stockholder or disgruntled employee decides to vent hostile feelings or provide fictitious or real "insider" information in an attempt to manipulate stock prices or otherwise affect the chat room operator's reputation. Entities can also be held liable for claims relating to intellectual property concerns, including claims involving copyrights, trademarks and trade secrets.

Chat room operator liability, like so many areas of the law involving the Internet, is an area that is changing rapidly. Good legal counsel can provide advice regarding how to operate and monitor a chat room to minimize the risks associated therewith.