Did McDonald's MY alienate itself with the BDS lawsuit?

Battered from months of boycotts, McDonald's Malaysia has decided to withdraw a brand defamation legal suit against the Boycott, Divestment, Sanctions (BDS), a Palestinian-led movement for freedom, justice and equality that has been vocal in calling out brands who have affiliations with Israel.

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"McDonald’s Malaysia filed a brand defamation legal suit to ensure McDonald’s Malaysia’s position on the Middle East conflict is made clear," it said, referencing the suit in which it accused BDS of allegedly inciting the public to boycott McDonald's Malaysia early this year. It claimed that these statements hurt its business and was seeking damages. 

It said:

With the positive outcome of the mediation and clarifications made by BDS in its recent statements, acknowledging that the actions of McDonald’s operator in Israel are wholly independent of McDonald’s Malaysia, we will be withdrawing the legal suit.

McDonald's Malaysia added that its stance remains firm in that it does not support or are complicit in any conflicts or wars.

However, it would seem that the damage to McDonald's reputation has already been done. According to media intelligence firm CARMA, prior to withdrawing the lawsuit, McDonald's Malaysia's sentiments 15.4% positive and 59.2% negative.

Following the withdrawal, netizen sentiments remained similar at 12.6% positive and 62.3% negative. In fact, a majority of the comments since the withdrawal are about netizens criticising McDonald's for their business practices during times of social unrest or crisis.

While it is true that McDonald's Malaysia did start the lawsuit in an attempt to clear its name and to avoid the very boycotts it is seeing now, were its attempts at legal reparation and subsequent backing down all just a little too late?

Ashvin Anamalai, chief executive officer of DNA Creative Communications said that it is important to address public concerns promptly and transparently and that lawsuits can sometimes be a strategic option to do just that. However, it is first crucial to assess whether they align with the organisation’s broader communication goals and public sentiment. He said:

In many cases, a more empathetic and open approach to engaging with stakeholders can lead to better outcomes, fostering trust and understanding.

Anamalai added that he would only suggest taking a strong legal stance when all other avenues of resolution have been exhausted, and when the potential damage to the brand from not doing so outweighs the risks associated with legal action.

"This decision should be made after careful consideration of the specific circumstances, including the severity of the allegations, the potential impact on stakeholders, and the organisation’s overall values and reputation," he said, adding that it is essential to weigh the potential consequences of legal action against the benefits of preserving brand integrity and addressing underlying issues effectively.

Anamalai went on to explain that it is important for international clients to recognise that Malaysians have "strong opinions", particularly on issues they are passionate about.

As a result, he suggests thoroughly understanding local nuances and the potential for public mobilsation and unity towards common goals.

"Brands should prioritise authentic engagement, listening to and respecting the concerns of Malaysian consumers, while also demonstrating a genuine commitment to addressing those concerns," he said. 

Agreeing with him, Syed Mohammed Idid, general manager of strategic communications and stakeholder engagement at West Coast Expressway (WCE) said that the lawsuit against the BDS movement certainly caused significant damage McDonald's Malaysia's reputation. He added that it is likely that the negative publicity from the lawsuit caused more damage to McDonald's Malaysia's reputation than the BDS movement ever could have.

He explained that by suing a group that criticises Israel, McDonald's Malaysia inserted itself into a "complex and controversial political issue". This essentially "alienated" some customers who may now view McDonald's Malaysia as being supportive of Israel, he said.

"I would advise an organisation to take a strong legal stance only as a last resort. Legal battles can be expensive and time-consuming, and they can damage a company's reputation. In most cases, it is better to try to resolve disputes through negotiation or mediation," he said. 

When asked if it is possible for McDonald's to redeem itself at this point, Idid was confident that it would make a comeback. However, there are necessary steps that it needs to take, he said. 

The company has already taken a step in the right direction by withdrawing the lawsuit. However, it will need to do more to win back the trust of customers who have been alienated.

Idid suggests that fast food giant issue a public statement that clarifies its position on the Israeli-Palestinian conflict and that it reaches out to the Malaysian and Muslim community by sponsoring local events or by partnering Muslim charities to win back favour.

 McDonald's Malaysia is already on the right track and recently said that its stance remains firm in that it does not support or are complicit in any conflicts or wars. It added that it is proud to be a 100% Muslim-owned business and member of the local community in a statement this week. 

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