Using Social Media in Business Disputes
Until recently, the mere threat of litigation and the prospect of a prolonged and costly lawsuit was often all that it took to persuade a smaller business to acquiesce to a larger competitor’s legal demands. But that’s changing.
Large companies frequently exploit their vastly superior legal resources and capabilities to the disadvantage of smaller competitors. Frequently, the mere threat of litigation and the prospect of an expensive, prolonged lawsuit is all that is necessary to persuade a smaller business to acquiesce to the larger competitor’s legal demands. However, I have recently studied an emergent defensive strategy that turns the tables on large companies when they legally threaten smaller enterprises. The approach involves soliciting public support, typically through social media and public relations, in hopes of achieving a favorable outcome. I call this technique “lawsourcing.”1
Lawsourcing in Practice
The idea of lawsourcing — a variation of what is often referred to as “crowdsourcing” — isn’t completely new. Back in 1984, when Vermont-based Ben & Jerry’s Homemade Inc. was a six-year-old upstart in the ice cream business, the Pillsbury Co. (then the owner of the Häagen-Dazs ice cream brand), attempted to curtail the growth of Ben & Jerry’s by pressuring some distributors to become exclusive distributors and not to handle Ben & Jerry’s products. Ben & Jerry’s fought back hard, with a scrappy campaign built around the slogan “What’s the Doughboy Afraid Of?” Founders Ben Cohen and Jerry Greenfield plastered their slogan on bumper stickers, the sides of buses, and airplane banners, and they posted a toll-free number on their ice cream containers. Pillsbury backed down, but not before Ben & Jerry’s captured what one writer called “a generous scoop of free publicity for its guerrilla tactics.”2 (Cohen, in fact, was quoted as saying, “They tried to fight us in court, but we fought them in the public’s mind instead.”)
Lawsourcing campaigns can provide significant benefits, including greater brand awareness and loyalty and increased sales. In recent years, social media and modern technology have provided a powerful platform and a set of tools for companies that want to fight back. By leveraging public support, companies can advance their legal and public-relations goals. Consider the case of Hampton Creek Foods Inc., a small San Francisco-based food producer.
1. D. Orozco, “The Use of Legal Crowdsourcing (‘Lawsourcing’) as a Means to Achieve Legal, Regulatory and Policy Objectives,” American Business Law Journal 53, no. 1 (forthcoming in 2016).
2. J.P. Kahn, “The Inc. 100 Portfolio,” Inc., May 1986, www.inc.com.
3. A.C. Kaufman, “Hellman’s Mayo Drops Lawsuit Against Eggless ‘Just Mayo,’” Huffington Post, Dec. 19, 2014, www.huffingtonpost.com.
4. See U.S. Food and Drug Administration warning letter to Hampton Creek Foods, Aug. 12, 2015, www.fda.gov; see also M. Koren, “The True Meaning of Mayonnaise,” The Atlantic, Aug. 25, 2015, www.theatlantic.com.
5. J. Bidgood, “Chicken Chain Says Stop, but T-Shirt Maker Balks,” New York Times, Dec. 5, 2011, A12.
6. A. Thurlow, “Challenge to Craft Beer Taprooms Is Withdrawn,” Jacksonville Business Journal, Jan. 28, 2015.
7. R. Wilson, “Auto Dealers Move to Block Tesla Sales Model in State Capitals,” Washington Post, March 12, 2014; see also Orozco, “The Use of Legal Crowdsourcing (‘Lawsourcing’).”
8. C. Dougherty and M. Isaac, “Airbnb and Uber Mobilize Vast User Base to Sway Policy,” New York Times, Nov. 5, 2015, B1.
9. “TEDxSIT: Bo Muller Moore ‘Accidental Activist,’” Youtube video, June 17, 2012, www.youtube.com.
10. D.P. Baron, “The Nonmarket Strategy System,” MIT Sloan Management Review 37, no. 1 (fall 1995): 73-85.