A competitor tells customers my product is fake or unsafe. Is that defamation or malicious falsehood?

A rival tells your customers that your goods are counterfeit, that your product is dangerous, or that you are about to close down. Sales drop. This guide explains which claim fits, what you must prove, and how to move quickly.

Defamation or malicious falsehood?

The two claims protect different things.

• Defamation protects reputation. The words must tend to lower you in the estimation of right-thinking people: for example, saying you knowingly sell fakes, which suggests dishonesty.
• Malicious falsehood protects economic interests. It covers false statements that damage your business even if they do not attack your character: for example, saying your product contains a harmful ingredient, or that your shop has closed.

Two specific forms are slander of goods (false statements disparaging your goods) and slander of title (false statements about your ownership of property or rights, such as claiming your brand belongs to someone else). The same facts can support both defamation and malicious falsehood.

What must I prove for malicious falsehood?

Generally:

• the statement was false;
• it was published maliciously, meaning the competitor knew it was false, was reckless as to its truth, or acted with an improper motive; and
• it caused, or was calculated to cause, financial damage.

Unlike defamation, where the defendant must prove truth, in malicious falsehood the claimant proves falsity.

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Do I have to prove actual loss?

Not always. Under section 6(1) of the Defamation Act 1957, in a claim for slander of title, slander of goods or other malicious falsehood, it is not necessary to allege or prove special damage if the words:

• were calculated to cause pecuniary damage to you and were published in writing or other permanent form; or
• were calculated to cause pecuniary damage to you in respect of any office, profession, calling, trade or business you held or carried on at the time.

Broadcast statements count as permanent form (s.6(2) applying s.3). Most competitor statements about your products in posts, flyers or messages fall within these categories.

Gathering evidence

• Screenshots of posts, with URLs, dates and the account.
• Customer statements about what they were told and by whom.
• Test reports, certificates or regulatory approvals showing your product is genuine or safe.
• Sales records before and after the statements.

Urgent relief

Where statements are continuing, you may apply to court for an interim injunction to stop them before trial. Courts approach injunctions restraining speech with caution, so strong evidence of falsity and prompt action matter.

What should I do first?

1. Capture the statements with dates and sources.
2. Gather proof that the statements are false.
3. Identify customers who heard or received them.
4. Send a letter of demand asking the competitor to stop and retract.
5. Do not respond in kind with statements about the competitor.

Example

A distributor of imported cosmetics learns that a rival is telling salons on WhatsApp that its products are "fake and cause skin burns". The distributor has authorisation letters from the manufacturer and product notification records. The messages are in writing and calculated to cause financial loss, so special damage need not be proved (s.6(1)). It sends a demand, and then applies for an injunction when the messages continue.

Common mistakes

• Pleading only defamation when the real harm is to the product.
• Not gathering proof that the statements are false.
• Delaying, which weakens an injunction application.
• Making counter-allegations that expose you to a claim.

When to speak to a lawyer

Speak to a lawyer when a competitor's statements are affecting your sales or customer relationships. See our defamation page; you can also contact us.

Frequently asked questions

Can a company sue for defamation?

A company can sue for defamation that damages its trading reputation, and can also sue for malicious falsehood.

What if the competitor says my goods infringe their trademark?

Unjustified threats and false claims about rights may raise other issues, including trademark law. Take advice on the full picture.

How long do I have?

Claims founded on tort are generally subject to a six-year limit (Limitation Act 1953, s.6(1)(a)), but delay can defeat urgent relief.

Sources & fact check

Legal points in this article were checked against the primary sources below. The law can change; this is general information, not legal advice.

1. Defamation Act 1957 (Act 286), AGC Laws of Malaysia
2. Limitation Act 1953 (Act 254), including section 6, AGC Laws of Malaysia
3. Office of the Chief Registrar, Federal Court of Malaysia (Judiciary portal)

Fact-checked on 17 Oct 2026