N THE AGE of the Internet, Web sites have become an indispensable business tool. With a Web site, a corporation can present its public face at a fraction of the cost of traditional media advertising. Some corporations owe their entire existence to the Web, while others, especially those providing information and entertainment services, have refashioned their businesses around their Web sites. One of the chief advantages of a Web site is the opportunity it offers corporations to interface directly with investors, customers and the public at large. The possibility of immediate feedback from investors and customers makes businesses more efficient and profitable.
But this two-way flow of information comes at a price. When a corporation disseminates content through its Web site, it exposes itself to liability. Obviously a corporation is responsible for the material it creates and disseminates. Less obvious, but no less dangerous, is the possibility that a corporation may be held responsible for content on its site created by parties who have no relationship whatsoever to the corporation. Moreover, liability may attach even if the corporation had no knowledge, actual or constructive, of the third-party’s content. Defamation claims are the most common form of content-based liability, but the content of a site can render a Web site operator liable for copyright and trademark infringement, for business torts, and even for securities law violations.
