The concept of defamation might be alien to some, but it's a valid part of the law, to protect people's reputation from false claims.
Google has many examples of defamation settlements:
http://www.google.com/search?num=30...&c2coff=1&q=defamation+settlement&btnG=Search
Laws exist in most civilized countries on the topic. Indeed, it's a principle enshrined even in the United Nations "Universal Declaration of Human Rights", article 12:
http://www.un.org/Overview/rights.html
No one shall be subjected to arbitrary interference with his privacy, family, home or correspondence, nor to attacks upon his honour and reputation. Everyone has the right to the protection of the law against such interference or attacks.
Free speech is also an important principle, and defamation law is perfectly consistent with the right to speak the truth. Rights to free speech are not absolute. Someone who yells "Fire!" in a crowded theatre, or says "I have a bomb in my suitcase, buddy" at an airport, will quickly learn that their rights to free speech are not absolute.
A few folks also think the internet is somehow "different", and "not real". My online banking transactions certainly seem real. My online DVD rentals certainly seem real, as they come to my door. The cheques and wire transfers I get from internet commerce certainly feel real. In the infancy of tv or radio, perhaps folks though those media were "different", but the underlying principles of the law came to these new media, and the internet too.
Thus, if one falsely claims that "John Smith" is a thief, or a rapist, or worse, and publish it on the web, and cause that person to lose business contacts due to the false allegations, should that person just suffer damage? The law doesn't protect liars.
That doesn't mean every little insult or flamewar is worth a lawsuit. I've only ever had to initiate one lawsuit in my life, and am hardly litigious. Hopefully no one would ever have to go through any lawsuits in their life. But, just as if someone robbed my house, or conducted a bad business transaction, I'd protect my reputation. Indeed, the reputation of people is probably more precious than their physical assets. As Shakespeare wrote:
Good name in man and woman, dear my lord,
Is the immediate jewel of their souls;
Who steals my purse steals trash; ââ¬â¢tis something, nothing;
ââ¬â¢Twas mine, ââ¬â¢tis his, and has been slave to thousands;
But he that filches from me my good name
Robs me of that which not enriches him,
And makes me poor indeed.
