Tech Insider: High Court case has two big lessons for small business owners facing social media attacks

A High Court case has two big lessons for small business owners facing social media attacks.

A key case has the Harmful Digital Communications Act – historically, a vehicle for protecting private individuals from cyberbullying – used to protect a small business owner under siege. A study finds New Zealand businesses are busting their cloud budgets. Streaming gets simpler – and the commercial machinations more complex – as Apple TV+ comes to Amazon’s Prime Video.

A High Court judgment has two big takeaways for small business owners facing attacks on social media, Simpson Grierson litigation partner Jania Baigent says.

It extended the protections of the Harmful Digital Communications Act 2015 to a small business owner even though she was not named in a series of attacks.

But it also serves as a warning that small businesses have to carefully monitor comments left after their social media and website posts, Baigent says.

The judgment, made on October 31 and released on January 29, upheld an earlier District Court decision relating to Facebook posts that Samuel Tucker, a former employee of Metro Paws Doggy Daycare and Pet Hotel in Te Rapa, Hamilton, made about the business.

In early 2021, Tucker made a series of posts to his own Facebook account and a Facebook page he set up called “Political Action for Animals Waikato”, alleging animal cruelty at Metro Paws.

He called on the SPCA to investigate the claims, which were denied by the owners. (The non-profit organisation did. It said the volume of complaints was concerning, but all anecdotal and decided not to prosecute.)

His posts were shared more than 200 times and drew hundreds of comments. Baigent notes Tucker did not name the owner of Metro Paws, Nicola Pere, and the commenters adhered to his request not to name her. But as the public face of the business, she was easily identifiable.

Comments included vicious language and threats of personal violence against Pere (detailed in Justice Jane Anderson’s High Court judgment).

Pere said she felt unsafe in her home because one of the commenters knew where she lived.

She feared she or her staff would be physically attacked. In an affidavit, she said she had panic attacks so severe she had difficulty breathing.

She was terrified to use her work vehicle with Metro Paws livery for fear she would be abused, threatened or followed home.

She had to remove herself and her business from social media to protect her and her staff from abuse and she suffered from anxiety and sleeplessness, sought medical advice and took medication to ease her symptoms.

District Court Judge Simon Menzies made orders under the Harmful Digital Communications Act requiring Tucker to take down his posts and refrain from making similar posts in future.

Tucker complied and said he did not intend to make future posts, but appealed to the High Court on what he said was a point of principle. He argued his freedom of expression under the Bill of Rights Act 1990 had been violated.

In her judgment rejecting Tucker’s appeal, Justice Anderson underlined that the Harmful Digital Communications Act can be applied.

“The basis for limiting standing to individuals is that a body corporate is an artificial construct and cannot itself suffer emotional distress. However, as the Law Commission observed [in a 2012 ministerial briefing paper when the HDCA was still being drafted], ‘An attack on a small business will often be read as an attack on the proprietor personally, in which case he or she will have standing to complain’.”

Tucker’s posts were “graphic” and “overly emotive”, Justice Anderson wrote, but did not violate Principle 2 of the act (”A digital communication should not be threatening, intimidating, or menacing”).

But there was reference to the “owner” as responsible. They also refer variously to “she”, “her” and the “boss” in the context of a small family-owned business.

There were still threats of violence. “I accept the level of fear Ms Pere felt was justified, including because it is evident that some people posting were aware of where she lived,” Justice Anderson wrote.

There were also comments calling for people to visit Metro Paws premises to “enforce” against them.

Tucker told his followers he would delete any comments mentioning staff members; and that advocated violence or encouraged illegal behaviour in any way.

Justice Anderson noted he had the admin power to delete posts on his Facebook account and the Facebook page he created or disable comments altogether.

Some comments were deleted by Tucker. “Yet, his efforts did not prevent the abusive posts being made and/or prevent a large number of people (including Ms Pere) from reading them during the period they were live,” Justice Anderson said.

Simpson Grierson litigation partner Jania Baigent: “My take-home from that is that the case shows that there is a very powerful protection available to small business owners.”

Judge Menzies was correct to note that “Tucker’s right to freedom of expression under the New Zealand Bill of Rights Act is not absolute and the orders sought were not inconsistent with that right”, Anderson said.

She added, “Tucker’s platform had had the effect he sought in producing content aimed at having the SPCA investigate. Ultimately, it decided not to prosecute.

“In the circumstances, permitting the posts to remain after that point was likely to result in continuing harm to Ms Pere, yet without the original justification from a public interest perspective.”

Anderson ruled Tucker was not entitled to recover costs of $1912 for steps taken prior to the grant of legal aid. He was also ordered to pay Pere $956 in costs. She added: “But for the application of s 45(2) [a section of the Legal Services Act 2011 that limits liability for an aided person of limited means], I would have awarded Ms Pere scale costs on a 2B basis of $14,818 and disbursements of $218.35.”

This was not the first time a small business had bought a prosecution under the Harmful Digital Communications Act.

In 2022, an action brought against influencer Pebbles Hooper by Bernadette Gee, owner of Magnolia Kitchen, had a judge bar Hooper from making social media posts about the baker. (On appeal, the ban was time-limited until August 2023; Magnolia went out of business several months before that date).

“My take home from that is that the case shows that there is a very powerful protection available to small business owners,” Baigent says.

“There’s been a couple of cases earlier in a similar area, but this has gone one stage further and provided protections even when the owners are not named in the post.”

The flipside: The judgment also highlighted that the party “hosting” a social media post – in this case, Tucker rather than Facebook or its owner Meta – is responsible for policing comments.

That means any host, including a small business, has to be vigilant, Baigent says.

Retired District Court Judge David Harvey contributed to the Law Commission’s work shaping what would become the Harmful Digital Communications Act.

He recently wrote: “Tucker v Pere is a helpful addition to the developing case law on the HDCA because it further assists in assessing standing when a post ostensibly targeting a business, company or indeed a group may extend to apply to an individual who may, if able to satisfy the threshold requirements, bring an application for Section 19 [take-down] orders”.

Harvey added to the Herald, “I have a feeling that the law could go two ways following that decision. The first is that it opens the door to business owners – and by extension, members of groups – to claim the protection of the HDCA and use it as a means of silencing criticism or unfavourable commentary. We all know how terrified businesses are of unfavourable comments on social media. The only problem is that the interference with freedom of expression and robust discussion could be compromised if the door is opened too wide.

“The second is that the courts could restrict the holding in Tucker to the facts and develop a number of tests whereby the association of the business with the individual bringing the proceeding must be clearly or strongly inferentially defined.”

If you want to make a complaint under the Harmful Digital Communications Act, your first port of call has to be Netsafe, the approved agency for the legislation, Baigent says. If Netsafe can’t resolve the issue, it can be escalated to the District Court.

• Read Justice Anderson’s full judgment here. Warning: Strong language, violent language.

Cloud budgets busted

In Australia and New Zealand, sustainability emerged as the top consideration when selecting a cloud storage provider, according to a study of 250 businesses across Australasia.

It was commissioned by Wasabi Technologies, a maker of storage management technology that can be integrated with AWS, Google Cloud, Microsoft Azure and other platforms.

But budget overruns and cloud storage fees remain a significant challenge as cloud storage pricing models remain unpredictable, contributing to rising costs across the region.

That resulted in 66% of Australia-NZ respondents exceeding their planned cloud storage spending in the past year – a higher rate than the global average of 62%, Wasabi says.

Fees are also slowing down businesses and might be making them more vulnerable to attacks, Wasabi Australia-New Zealand managing director Craig Stockdale says.

More than half of Australia-NZ organisations said they experienced IT or business delays due to egress and/or data access fees, and almost half (44%) of New Zealand businesses say costs and fees associated with enabling certain security features are the top data security-related challenge, according to the survey.

The survey of 1600 firms worldwide found that globally:

• 54% of Microsoft Azure users exceeded budget;
• 62% of AWS users exceeded budget;
• 65% of Google Cloud Platform users exceeded budget;
• 71% of Alibaba users exceeded budget.

The report also showed pricing is the No 1 influence on “dissatisfaction” in Australia-NZ, further illustrating the negative impact of fees, particularly unexpected fees.

“The fact is that every hyperscaler has the same pricing/fee/tier structure with very small deviations. And hyperscalers own 80% of cloud storage market share,” Wasabi strategy and market intelligence director Andrew Smith told the Herald.

“The vast majority of users rely on one or multiple hyperscalers for cloud storage and have to suffer with these fee structures regardless of who they use. And we don’t necessarily see one vendor gouging users more, AWS usually has the worst perception, but it’s because they are the market leader.

“The reality is many end users simply don’t fully understand the breadth of these fee structures when choosing a provider, and how material these fees can be on total cost of ownership.

“We also observe that many end users don’t fully know or can’t predict the changing behaviour of their applications and subsequent storage access rates. As workloads and applications evolve – (AI is a great example) – all of a sudden organisations find that their data is essentially stored in the ‘wrong’ tier and then incur a massive amount of fees because they didn’t anticipate changing usage patterns.

“Finally, users may have chosen the ‘right’ tier and fully intended to keep their data “cold” and never touch it, for example, but an event beyond their organisation’s control – like malware, ransomware attack, disaster recovery, accidental deletion – forces them to access data and incur a significant fee-based bill for doing so."

All of the hyperscalers – the Big Tech firms that run massive data centres – sell multiple cloud object storage tiers.

“For example, standard, warm, cool, cold, infrequent access and archive,” Smith said.

“These tiers all span from approximately US$23 per terabyte at the top end to US$1/TB at the low end. No matter the vendor, no matter the region deployed, cost per TB and cost of fees have an inverse correlation: the higher the cost per terabyte, the lower the impact of variable fees for things like degrees [extracting data], API operations, and data access and restoration. The lower the cost per terabyte, the higher the impact of variable fees.”

Severance: Now attached to more platforms. Photo / Apple TV+

Amazon’s Prime Video adds Apple TV+

The sometimes mind-bending evolution of streaming continues with news that Amazon’s Prime Video now supports Apple TV+.

If you’ve got the Prime app on your smart TV or other device, you can click to add Apple’s streaming platform (home to the likes of Severance, Silo, Slow Horses and Ted Lasso). The price is the same as through Apple – $14.99 a month – but it will be automatically added to your Prime bill, with no forms to fill in.

Prime has been adding new features – including an ad-supported option, pay-per-view premium movies and support for other apps – in New Zealand since late last year. Apple, for its part, recently made Apple TV (which offers Apple TV+ plus the optional MLS Season Pass) available for Android.

Every player wants to be your one-stop portal – but to make its content accessible on other platforms too.

More reshuffling will arrive tomorrow as Disney provides more details of its plan to bundle ESPN with Disney+ for Kiwis. Disney has long sold ESPN (which it 80% owns), Hulu and Disney+ in one discount bundle in the United States. Sky will continue to host ESPN content under what it calls a “co-exclusive” arrangement.

Chris Keall is an Auckland-based member of the Herald’s business team. He joined the Herald in 2018 and is the technology editor and a senior business writer.