Wrestler Hulk Hogan accused Gawker Media of invading his privacy by publishing a sex tape.
The media company now has to pay him more than US$100 million in damages.
Four years ago, Gawker published a sex video featuring Hogan and Heather Cole, the then wife of his best friend, Alan Clem.
Hogan asked the firm to remove the edited video from its website.
Gawker cited the First Amendment to the US constitution, which guarantees freedom of speech, and defended the video, saying it serves the public’s right to know and has news value.
Hogan sued Gawker for invading his privacy and sought US$140 million in damages.
In March, a Florida jury awarded Hogan US$60 million for emotional distress and US$55 million for economic damages.
Gawker decided to appeal the verdict but failed.
As a result, the New York-based online outlet, known for gossip and media reporting, is on the brink of bankruptcy.
What has made the story even juicier is the involvement of Peter Thiel, a co-founder of PayPal Holdings Inc. and early investor in Facebook Inc.
Gawker outed him as gay a decade ago.
Thiel has come under fire for using his wealth to drive the website out of business by giving financial help to Hogan and others on whom Gawker had reported.
However, Thiel defends his actions as “less about revenge and more about specific deterrence”.
The case has stirred up a huge controversy in Silicon Valley and stoked fears that other billionaires would follow suit, using their wealth to silence media firms that are against them.
Media companies lack financial support in fighting these legal cases.
However, several tycoons in Silicon Valley have voiced support for press freedom.
Pierre Omidyar, the billionaire founder of eBay, has pledged to support Gawker in an appeal.
Amazon.com chief executive Jeff Bezos, commenting on the saga, said, “Seek revenge, and you will dig two graves, one for yourself.”
Bezos said in an interview that “the best defense against speech that you don’t like about yourself as a public figure is to develop a thick skin”.
Most people don’t have the financial support needed to pursue legal cases against the media, which is shielded by the First Amendment in the US.
The final outcome of this drama may transform the landscape of US media in terms of balancing privacy against the public’s right to know.
This article appeared in the Hong Kong Economic Journal on June 7.
Translation by Julie Zhu
[Chinese version 中文版]
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