 MagicJack sued news site Boing Boing after it wrote an expose revealing that MagicJack's website had faked services and that the company spied on its users. MagicJack has lost the suit and been order to pay damages. (Source: Boing Boing)
Company finds that bullying news writers doesn't always work out so well
The
news industry on the surface is a level playing field in which
competitors look to showcase their products and services and writers
seek to share information on events and products in as unbiased a
manner as possible. In reality its far from that.
Corporate bullying, payoffs, and subterfuge are sadly very
commonplace -- as illustrated by DailyTech founder
Kris Kubicki's now famous exposé
on payola in the tech news industry.
For those sites
and writers in the News Industry who strive for free
speech and honesty, it's often a tough fight. This was
illustrated in the case of MagicJack v. Boing Boing. Boing
Boing,
a tech news site, in April 2008 wrote a scathing
review of MagicJack's flagship product, a USB dongle that
allows users to place free or inexpensive calls over the
internet.
In the article, Boing
Boing revealed
that many aspects of MagicJack's site were fake -- namely its user
counter was rigged to be a self-incrementing variable (regardless of
actual user numbers) and the help service produced inaccurate
results, stating that it was "scanning" your system and
reporting "Your MagicJack is functioning properly" even if
you didn't have one installed.
More
importantly, Boing
Boing pointed
out that the EULA -- not available at the point of service or on the
company's website -- signed away users' rights. The EULA
allowed MagicJack to snoop on your calls and use them to target their
ads at you. It also contained legal languages that attempted to
sign away your rights to sue them (such provisions usually don't hold
up in court).
In response to the piece, MagicJack sued Boing
Boing for
defamation in March 2009 in Marin, California. The suit claimed
that the post was "false, misleading, and had irreparably harmed
MagicJack's reputation by exposing it to 'hate, ridicule and
obloquy'", according to Boing
Boing.
It demanded the post be removed and unspecified damages be paid.
The
suit was essentially just legal bullying. As Boing
Boing summarizes,
"Our lawyers, Rob Rader, Marc Mayer and Jill Rubin of MS&K,
determined that it was a SLAPP
lawsuit: a strategic lawsuit against public participation. In
such a lawsuit, winning is not the main objective. Instead, it is
crafted to harry critics, not least with the high cost of fighting a
lawsuit, into abandoning their criticism. New York Supreme Court
Judge J. Nicholas Colabella wrote that 'short
of a gun to the head, a greater threat to First Amendment expression
can scarcely be imagined.'"
Fortunately, California
has anti-SLAPP laws on the books and when Boing
Boing exercised
them and MagicJack could not demonstrate a reasonable hope of winning
in the case, it was dismissed. MagicJack CEO Dan Borislow then
personally apologized to the site and offered to pay its legal
charges -- if they kept the case confidential. Boing
Boing
agreed to comply if Mr. Borislow donated $25,000 to charity.
Mr. Borislow refused.
Now at last the case is over, and it's
another victory for Boing
Boing.
A judge ordered MagicJack to pay Boing
Boing $50,000
in legal costs for bringing the junk suit against the news
site.
Boing
Boing has
more details on the case and MagicJack's sordid history here.
"I'm an Internet expert too. It's all right to wire the industrial zone only, but there are many problems if other regions of the North are wired." -- North Korean Supreme Commander Kim Jong-il
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