capt - there has been much debate, even from US Supreme Court judges about how a well-funded threat to sue can intimidate websites run by those less wealthy. There is also an awareness that not much is done by legislators in many countries to resolve this.
If you were running a website and had been advised that some smart-ass lawyer might construct a case to show that you had *personal* liability for not acting earlier to remove content that was claimed to be defamatory, would you *really* risk everything, including the family home ? What would you say to your kids if you lost the case and faced bankruptcy ?
Yes, there is an issue of freedom of speech here, but it needs a legislative or judicial body (i.e. national parliament or senior court) to give an opinion on the issue. Until then, well-funded corporates will be able to call the shots over smaller less well-funded websites.