MagicJack lose defamation case, charged $50,000

One of the more controversial products we've written about – certainly one which provokes the most argument among commenters – is the MagicJack VoIP adapter.  Thanks to regular cable TV adverts, a "too good to be true" confusion about the service and an outspoken CEO, the company regularly find themselves the subject of debate.  That debate flipped over into a legal battle, however, when Boing Boing critiqued the MagicJack EULA; the VoIP firm decided they didn't like the accusations that they would use call information to target customers with adverts, took Boing Boing to court, and ended up having to pay $50,000 in damages.

The whole tale began in March 2009, and included attempts by MagicJack to have Boing Boing cover up the details of the case (in return for paying their legal fees) as well as CEO Dan Borislow blaming his own lawyers for poorly preparing him.  Boing Boing offered MagicJack the chance to keep the settlement amount confidential if they'd donate $25,000 to charity, but the company declined.

Every time we write about MagicJack we have comments both from contented users and from those warning against the service; some people are also content to see adverts in return for admittedly very cheap calls.  However, the problem comes when MagicJack aren't willing to see the details of that advertising – and their EULA policy as a whole – in the public domain.  We'd wager things are going to get even more complex when MagicJack's upcoming femtocell is released.