A False Statement of Fact That Damages a Reputation
Online defamation is, at its core, the same thing as defamation anywhere else: a false statement of fact, communicated to someone other than the person it's about, that damages that person's or business's reputation. "Online" describes where it happened, not a separate legal standard. Because content on the internet is almost always in some fixed, written, or recorded form — a post, a review, a video, a comment — it's generally treated as libel rather than slander (spoken defamation), even if the original statement was said out loud on camera.
Three elements matter most in practice. First, it has to be a statement of fact, not an opinion — "they're a scam artist who stole my deposit" is a factual claim; "I had a bad experience and wouldn't recommend them" is opinion, even if it stings just as much. Second, it has to be false; true statements, even damaging ones, generally aren't defamatory. Third, it has to be published to a third party — a private message only the two of you can see behaves differently, legally, than a public post.
What This Looks Like in Practice
Likely Defamatory
A review claiming a business "stole my payment and never delivered" when the transaction actually happened as agreed; a post falsely claiming someone was "fired for theft" when that never occurred.
Likely Protected
"The service was slow and overpriced, I wouldn't go back"; "In my opinion, this contractor cut corners." Both are subjective assessments, not factual claims capable of being proven true or false.
The line isn't always this clean, which is exactly why an early, honest read on where specific content falls matters before you invest in a response.