Protecting Companies’ Commercial Reputation from Abuse and Defamation in the Digital Environment: A Legal Framework and Practical Approach

Protecting Companies’ Commercial Reputation from Abuse and Defamation in the Digital Environment: A Legal Framework and Practical Approach

Commercial reputation in the media age is one of the most significant intangible assets of companies and a major factor influencing market confidence and the stability of contractual relationships. With continuous daily communication via social media platforms, instances of abuse and defamation against companies have increased. However, dealing with abuse and reputational damage has become part of compliance and governance systems rather than merely a public relations issue.

Saudi law has reinforced this approach by combining criminalization in cases of publicity with compensation where specific harm is established, pursuant to the Anti-Cybercrime Law, the Civil Transactions Law, and decisions of the Supreme Court.

First: Defamation under Saudi Law

Defamation is a criminal offense punishable under the Anti-Cybercrime Law. It includes any act involving the publication of false or misleading information, news, or rumors that harm the reputation of others and cause damage to them.

Second: Electronic Defamation

Electronic defamation is defined as the use of digital platforms, including social media, to publish false and misleading information with the intent to harm reputation, blackmail, or exploit others.

Penalty for Defamation in Saudi Arabia

Article (3), paragraph (5) of the Anti-Cybercrime Law provides that:
“Any person who commits any of the following cybercrimes shall be punished by imprisonment for a period not exceeding one year and/or a fine not exceeding SAR 500,000: (5) Defamation of others and causing harm to them through various information technology means.”

Fine for Defamation in Saudi Arabia

The penalty for defamation includes imprisonment for a period not exceeding one year and/or a fine not exceeding SAR 500,000.

Third: Classification of Abusive Acts and Their Impact on Companies

Acts targeting commercial reputation are classified into published abuse and private abuse. Published abuse is considered more serious, as it directly affects public perception and falls within the scope of criminalization if it involves defamation or the attribution of false facts. At the same time, it is subject to claims for compensation pursuant to Article (138) of the Civil Transactions Law.

Private abuse, which does not involve public dissemination, is subject to claims for compensation without falling under the scope of cybercrimes. The importance of this distinction lies in guiding companies toward the correct legal course, whether by filing a compensation claim before the General Court or submitting a criminal complaint when publicity is established.

Fourth: Practical Implications of the Legal Provisions for Companies

Article (138) of the Civil Transactions Law

This article constitutes the cornerstone of protecting commercial reputation, as it provides that compensation includes moral damage, encompassing harm affecting the status or reputation of a person or entity. When applied to companies, any infringement of their reputation or commercial standing constitutes compensable damage, whether committed by an individual, a competing entity, or a client.

Article (3) of the Anti-Cybercrime Law

This article forms the basis for criminalizing electronic defamation when publication occurs publicly. In such cases, the company has two parallel avenues:

• Public right proceedings through the competent authorities; and
• Private right claims for compensation.

Supreme Court Decision No. (7/M)

This decision determined the legal course for abuses occurring in a private context. It established that the الأصل (general rule) is to seek compensation before the General Court based on tort liability. If compensation is not achieved or damage is not proven, the claimant may then file a discretionary (taʿzīr) criminal claim before the Criminal Court. This decision represents a disciplined approach to allocating jurisdiction and determining the appropriate legal approach before resorting to criminal sanctions.

Fifth: Judicial Trend in Distinguishing Permissible Criticism from Actionable Abuse

It is worth noting a judicial trend reflected in certain judgments—although not a binding judicial principle issued by the Supreme Court—that adopts an objective approach in distinguishing between lawful criticism and abuse giving rise to liability. Some judicial panels have concluded that statements made in the context of commentary or opinion, where there is no intent to defame or cause harm and no actual impact on the commercial standing or reputation of the defendant, do not in themselves constitute a harmful act.

The significance of this trend lies in preventing unjustified expansion of defamation claims and focusing on two essential elements: intent and damage. This approach aligns with the nature of the digital environment, which requires a careful balance between a company’s right to protect its reputation and the public’s right to express experiences or opinions without abuse.

Sixth: Daily Practices for Protecting a Company’s Digital Reputation

Open platforms such as Google Maps have become a primary destination for customer feedback, making them part of the digital environment affecting companies’ commercial reputation. Reviews containing abuse or false allegations may be classified as harmful acts affecting commercial standing and thus fall under Article (138) of the Civil Transactions Law, or under the Anti-Cybercrime Law if publicity is established.

From a practical perspective, Google provides a technical mechanism to remove violating content upon reporting, which is a rapid measure that limits the spread of abuse. However, this does not replace the legal course of action where damage has occurred, nor does it achieve compensation, which falls within the courts’ jurisdiction. Accordingly, companies are advised to include monitoring of Google reviews within their compliance and risk management policies as part of protecting intangible assets and digital reputation. Content monitoring should extend to other platforms, with responses governed by clear internal policies that include documentation, legal assessment, and determination of the appropriate procedural path.

If your company has been subjected to digital defamation or commercial abuse, a specialized legal team at Al-Salamah Law Firm and Legal Consultations can assist you in assessing the appropriate course of action.

Questions & Answers

Conclusion

Protecting companies’ digital reputation has become an integral part of risk management and compliance. With the growing reliance on open platforms and the expansion of reviews, companies are required to establish a proactive framework that includes content monitoring, risk analysis, and the use of available technical and legal mechanisms. It is expected that regulatory practices related to digital reputation will become more stringent and that civil claims related to commercial abuse will increase. Consequently, the most prepared companies are those that treat reputation as a commercial asset that must be protected not only from a legal perspective, but also from a comprehensive strategic standpoint.