Payment of $787.5m to Dominion voting by Fox News one of US’s largest defamation settlements

“The customer is always right” is a phrase popularised by retailers who learned that success in their stores depended on giving shoppers what they wanted.

Translating that formula into the news business – where truth and accuracy is supposed to be at its core – can be far more problematical, as the conservative Fox News channel in the United States discovered on Tuesday.

Fox News agreed on Tuesday to pay $787.5 million to settle a defamation action brought against it by Dominion Voting Systems arising from false assertions made by allies of former president Donald Trump about the 2020 election being stolen.

At its heart the Dominion case was that Fox News decided to tell its viewers what many appeared to want to hear after the 2020 election – that their hero Trump had in some way been cheated out of a second term in the White House – because it feared losing audience share to rival channels that were further to the right.

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Dominion maintained that its reputation was badly damaged when Fox repeatedly broadcast false claims about its voting machines.

Fox denied defamation and argued that it had had merely reported on newsworthy allegations made by Trump and his supporters. The company contended this was protected under the free speech provisions of the US constitution.

[ What are the other legal cases Fox News is facing? ]

The discovery process in the case brought into the public domain internal texts and emails that showed conspiracy theorists were allowed on air to promote false claims of voter fraud in the election even when several top anchors were, to say the least, sceptical about such assertions.

The $787.5 million payment agreed by Fox News on Tuesday is one of the largest defamation settlements in American legal history.

But by agreeing to sign this enormous cheque, Fox avoided a potentially devastating trial which could have seen its main owner, Rupert Murdoch, as well as a number of its leading on-air presenters such as Tucker Carlson, Sean Hannity and Maria Bartiromo forced to take the stand and give evidence.

It would appear that the network will not have to make any on-air apology to Dominion for its claims – which could have been difficult for it given that many of its viewers continue to believe Trump’s allegations that the 2020 election was stolen by Joe Biden and his Democratic Party.

Fox said in a statement after the settlement was reached: “We acknowledge the court’s rulings finding certain claims about Dominion to be false.”

But despite the huge settlement on Tuesday, the legal problems for Fox News may not be over.

Fox is already being sued by another technology company, Smartmatic, which in February 2021 filed a $2.7 billion defamation case over claims made on air regarding fraud in the presidential election. No date has yet been set for this legal action.

Separately Dominion is also taking legal action against a number of individuals who made allegations about the election, such as Trump lawyers Rudy Giuliani and Sidney Powell as well as against a number of other right wing TV channels.

Pursuing defamation cases in the United States is far harder for plaintiffs than it is in Ireland and such actions are easier for media organisations to defend, particularly when they involve public figures.

This dates back to a landmark Supreme Court case in the 1960s which found that to prove libel, a public official must show that what was said against them was made with actual malice – “with knowledge that it was false or with reckless disregard for the truth”.

The bar for plaintiffs in taking defamation cases can be high. However, the judge had ruled that statements Fox aired about Dominion were false, and curtailed some of its potential defences by deciding that its lawyers could not argue that it broadcast inaccurate information on the basis that the allegations were newsworthy.

Fox News is the top-rated news channel in the US and dominates conservative commentary in the country. The settlement represents about 20 per cent of its available cash resources.

A recent corporate filing showed that the Fox Corporation had about $4.1 billion “of cash and cash equivalents” on hand at the end of last year.

The settlement was worth about ten times the $80 million valuation of Dominion.

While it was one of the largest settlements to be publicly disclosed in US legal history, the size of out-of-court settlements are not always made known. In 2017 ABC News paid out $177 million to resolve a defamation case brought by a meat processor but the total cost may have been higher when contributions by the broadcaster’s insurers were taken into account.

Last November, a jury ordered Infowars broadcaster Alex Jones to pay more than $1.4 billion to families of victims of the Sandy Hook elementary school shooting in Connecticut.