This article is a contribution by Attorney Jaesik Moon of Choi & Lee Law Firm. If you would like to share quality content for startups in the form of a contribution, please contact the Venture Square editor team at editor@venturesquare.net.
How do you get news these days? Nowadays, few people read refined paper newspapers or current affairs magazines, and many people seem to get fragmentary news, rumors, and gossip through videos generated by YouTube algorithms and short-form videos on various social media. Since this form of transmission often does not reveal the source or the writer, it often leads to the creation of unverified false fake news based on such anonymity, and since it is highly contagious, the parties involved in the fake news suffer irreparable damage. Your company cannot avoid being attacked by such fake news either. Baek Jong-won also recently complained about damage caused by fake news. Therefore, in this episode, we will look into ways to respond to fake news, such as whether fake news about a company can be punished and whether damages can be compensated for damages caused by incorrect information.
1. Method of punishing defamation through criminal complaint
First, as the most powerful countermeasure, we will have those who spread fake news punished through criminal charges. The act of producing, distributing, and spreading fake news constitutes defamation. The criminal law also stipulates defamation, but since defamation through information and communications networks such as the Internet has a strong transmission rate and the degree of damage suffered by the victim is very great, the Act on Promotion of Information and Communications Network Utilization and Information Protection (hereinafter referred to as the “Network Act”) stipulates a stronger statutory penalty. Article 70 of the Network Act states that “A person who publicly reveals true or false facts through an information and communications network for the purpose of slandering a person and thereby damages another person’s reputation shall be punished.” Meanwhile, although the above provision explicitly states that only “people” are the subject of defamation, the Constitutional Court and the Supreme Court have ruled that corporations and companies can also be the subject of social credit or honor, and that the honor of a corporation refers to its social reputation and credit, making them the subject of defamation (see Constitutional Court Decision of the Full Bench in Case 2009Hun-Ga27, rendered on August 23, 2012, and Supreme Court Decision of Case 87DaKa1450, rendered on June 14, 1988).
If you are confused about whether this falls under the defamation crime under the Information and Communications Network Act, it would be a good idea to check the following:
– Whether the content of fake news is factual or opinion-based
– Whether there is an intention to defame the perpetrator
– Whether the facts revealed are in the public interest;
First, in order for it to be defamation, the content of the fake news must be a fact, not the writer’s opinion. Our courts define “facts” as reports or statements about specific past or present facts in terms of time and space, and the content of the expression can be proven by evidence. For example, “This company’s products don’t taste good,” “The beds aren’t comfortable,” “The rides aren’t fun,” “The academy teacher’s skills are lacking,” etc. are merely evaluations or opinions, but “They used Chinese ingredients,” “They copied foreign products,” “The academy teacher never studied abroad,” etc. are facts that can be proven by evidence.
And there must be a “purpose to defame.” Our courts define the purpose of defamation as “requiring the intention or purpose of harm,” and make judgments by considering the degree of damage to reputation, the content and nature of the facts stated, and the scope of the other party (Supreme Court Decision 2010do10864, November 24, 2011, etc.).
However, the judgment of whether there is an intention to defame depends on whether the facts revealed are related to the 'public interest'. Our courts consider that "the intention to defame is in conflict with the direction of the actor's subjective intention for the public interest," and therefore, unless there are special circumstances, if it is for the public interest, the intention to defame is denied. In other words, if the nature of the content is beneficial to the public or a large number of people, it is naturally judged that there is no intention or purpose of harm.
In that case, the question is what is for the 'public interest'. Our courts view this very 'broadly', saying that it "includes not only the interests of the state, society, and the general public, but also the interests and interests of specific social groups or all of their members." For example, in the case of a plastic surgery patient community saying, "There are many patients who had surgery from Dr. ** and experienced side effects," it is likely to be judged as being for the public interest, as it is information shared regarding the interests and interests of members who are interested in plastic surgery. Of course, this must be based on the premise that the revealed facts are true and not false. Therefore, if it is fake news that is not true, the requirement that it is for the public interest cannot be acknowledged.
In addition to the defamation mentioned above, you can also sue for obstruction of business. This is because our criminal law also punishes those who obstruct normal business operations by spreading false information.
2. How to receive compensation through a civil damages claim
If it is fake news that is subject to criminal punishment, you can receive compensation through a claim for damages. Our civil law stipulates that if you suffer damages due to an illegal act, you can hold the perpetrator liable for damages. This is because the illegal act naturally includes criminal acts such as defamation and obstruction of business. Therefore, in a civil case claiming damages for defamation, the presence of the elements examined above becomes a major issue. If the perpetrator has already been sentenced criminally for defamation, etc., I think civil compensation liability is almost certainly recognized.
However, in a claim for damages due to defamation, the scope of damages is important. Usually, it is considered clear from experience that mental suffering was caused by defamation, so 'compensation' is recognized as compensation for damages due to mental suffering. However, our courts tend to be passive in recognizing compensation for damages, so it is necessary to prepare various materials regarding damages and actively prove to the court that the degree of mental suffering is not small.
If a company is harmed by fake news, the biggest blow will be the decrease in sales. This decrease in sales (=operating loss) can be claimed as financial damage rather than mental damage. However, if there is no significant causal relationship between the defamation and the decrease in sales, it is not easy to receive compensation for it. Therefore, it is important to actively prove the causal relationship with the help of an expert.
3. Countermeasures against fake news
As previously discussed, there are countermeasures for fake news, such as criminal prosecution and civil damages claims, to have the perpetrators receive criminal punishment, or to receive monetary compensation through damages. Usually, both criminal prosecution and civil damages claims are filed at the same time, but sometimes, although it is certain that defamation will be recognized, it is realistically difficult to proceed with both methods, so a criminal complaint can be filed first to try to reach an agreement with the perpetrator, or if the criminal complaint results in a clear recognition of liability for damages, it is possible to file a claim for damages afterward.
The damage caused by fake news seems to be getting more severe as time goes by. It is important to respond in advance before it spreads indiscriminately, so we recommend that you discuss it with an expert as soon as you discover it and respond quickly.
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