What is a business reputation and how to protect it? Advice from an IT lawyer
Online business develops according to its own laws, which differ in many ways from the “rules of the game” offline. Both the formation and destruction of a company’s business reputation take place in a different way on the Internet. But at the same time the business reputation itself remains the main factor of profitable entrepreneurship.
What is the business reputation of an IT company or other legal entity? Lawrange’s lawyers have prepared an explanation. If the presented material is not enough, sign up for an individual consultation!
The difference between business reputation, image and goodwill
Representatives of the business environment often use the terms “business reputation”, “image” and “goodwill” as interchangeable. However, in reality the meaning of these concepts is different.
- The business reputation of the organization is an assessment of professional and business characteristics that has developed among partners and customers based on the results of the legal entity in the market of goods and services.
- Goodwill is the monetary value of goodwill, the difference between the market value of an enterprise and the carrying amount of all assets of that entity.
- Image is a marketing concept formed by using special means of promoting the image of the company, based on both real characteristics and those used for advertising purposes.
From a legal point of view, the notion of business reputation deserves attention, as it is used in legislative acts and agreements between business entities, as well as appears in claims.
What can damage a business’s reputation?
Reputational damage to online business can be caused in the following ways: 1) negative feedback; 2) dissemination of information that disgraces the organization. If we are talking only about negative reviews (in small quantities), then the task of serious damage to reputation is not a fact. But if negative information is spread among “opinion leaders”, in the media, on social networks – this is a real threat. The worst thing is when a whole PR campaign unfolds – there are negative reviews, and articles in the media, and comments on social networks.
Notice! Through the network, negative information spreads much faster and more widely than offline. The attractiveness of the brand for customers, partners and investors can be destroyed instantly. The result is a sharp drop in demand for goods and services, the refusal of partners to establish cooperation and investors in financing.
Important! The law does not interpret as disseminating information that tarnishes reputation:
expression of evaluative judgments;
appeals to regulatory authorities about possible violations in order to conduct an inspection (even if such assumptions are erroneous).
What is affected by a damaged business reputation?
Importantly! The business reputation of the company is:
- a means of individualization of a legal entity in a business niche – a way to stand out in the market among competitors;
- intangible asset – the result of the use of the best management skills, a dominant position in the market, new technologies;
- capitalization factor – the higher the business reputation, the higher the value of the enterprise.
A damaged reputation leads to an outflow of old and a lack of new customers, loss of profits, loss of employment, refusal of partners to cooperate, falling market value of the business. The consequences for online business come very quickly. As long as customers and partners figure out where the truth is and where the slander is, business may be in decline. To protect your business, you need to act immediately, namely: 1) look for PR to “clean” the reputation to change the attitude of customers and partners; 2) hire lawyers to file a lawsuit.
How to protect your business reputation?
If a lawsuit is filed and a decision is made in favor of the plaintiff, the protection of the company’s business reputation can be done in the following ways:
- compensation for damages;
- refutation of information that tarnishes reputation in the same media or on the same pages of social media where the information was published (refutation is written by the author of the article or another person on behalf of the relevant media);
- publication of the answer – reactions to negative information in the same media or on the same pages of social media;
- removal of materials that tarnish the reputation of the network, prohibiting their further distribution.
In this case, compensation for damages or other measures to influence the defendant is possible only in the case of building a competent strategy in court. The mere fact of spreading negative information about the company (even if it is false) is not enough.
Important! Reputation protection is based on proving a combination of the following circumstances:
- Prior to the incident, the company had a high business reputation on the Internet (evidence: high sales, positive customer feedback on independent sites, well-known partners).
- The company’s business reputation has suffered not by accident, and not as a result of the real deterioration in the quality of goods and services, but from the deliberate dissemination of negative information.
- The information disseminated is untrue.
- As a result of the dissemination of information that discredits the company, there were indeed adverse consequences: loss of trust from consumers and partners, falling sales and so on.
As in cases where the honor and dignity of an individual is protected, and in proceedings related to goodwill, it is difficult to gather the necessary arguments and evidence to obtain compensation. To do this, you need to enlist the support of an experienced lawyer.
Which companies help protect your business reputation?
Only if the lawyer has the necessary competence can you count on the result – to compensate for the damage, and to refute the information that discredits the company. There are few lawyers in Ukraine with such specialization. Fortunately, professionals can participate in litigation remotely. If you need IT lawyers with business reputation cases, you can find them at Lawrange Law Firm.
Conclusions
Business reputation is an intangible asset that should be protected and safeguarded. The market price of the business depends on it. And sometimes this asset can be like money, an investment or even a contribution to the capital of a newly created business entity. If you need it, protecting the company’s business reputation will be a task for Lawrange’s team of experts. And we will make every effort to achieve the desired result.