Lansons CEO Tony Langham had said last year that the lawsuit from Ariadne – founded by high-profile entrepreneur Julie Meyer, who also co-founded networking club First Tuesday – came after Lansons chased up £70,000 it said it was owed in unpaid invoices.
The lawsuit from London-based Ariadne accused Lansons, which worked with the firm for almost two years, of a "botched attempt to improve a Wikipedia entry in a campaign that did its reputation more harm than good".
Ariadne claimed damages of £100,000 from Lansons. The agency then counter-sued its former client for £76,000 in unpaid invoices.
Ariade has now withdrawn its legal action, two years after first issuing the lawsuit, and has paid an undisclosed sum to Lansons to settle the dispute. There was no court case and no damages were paid.
In a statement issued today, Langham said: "This was the first time in our 28-year history that we have been involved in a dispute like this and it’s not something we’re keen to repeat. Winning this legal battle is, partly, a pyrrhic victory, but we pursued Ariadne for payment as it was a matter of principle that we felt strongly about."
PRWeek asked Ariadne for comment but had received no reply at the time of publication.
According to the lawsuit, a Lansons employee had emailed Wikipedia asking for details of Ariadne to be updated on Wikipedia. The email was then published on the page, along with a message that the contents were disputed.
Ariadne claimed this led to accusations the company had tried to "manipulate its own entry" and caused "further negative updates on Wikipedia".
Ariadne had accused Lansons of failing to generate sufficient press coverage and said meetings with journalists were "random". Ariadne stopped paying its £6,000-a-month retainer when it believed that the agency "was not doing any discernible work".
Lansons argued in defence papers that any problems with the PR campaign were caused by Ariadne being "insufficiently appealing to the media".
The case also raised the issue of the difficulties PRs can face when trying to influence what is published on Wikipedia. The online encyclopaedia allows anyone to attempt to access or change what is published, although editors monitor submissions.
In 2011, Bell Pottinger was criticised following accusations of extensive manipulation of Wikipedia entries from anonymous accounts linked to the agency. The Independent and the Bureau of Investigative Journalism claimed that Wikipedia entries were amended by accounts linked to Bell Pottinger for clients including former Zambia president Rupiah Banda and the Central Bank of Sri Lanka.
Wikipedia founder Jimmy Wales told the BBC at the time that he was "highly critical of their [Bell Pottinger's] ethics".