Hello,
We have hired a development company from overseas few years back, and after we have seen that the work was not that great, we have decided to let this company go.

Development company did not take the news great, and there is more to the story, but to make the long story short, they started few blogs about our site, claiming that the site is selling fake merchandise and stealing from customers, etc. They have also linked all the blog posts between themselves with the right anchor text, so now when you type "Website name reviews" you get their blog post to show up on the position 3, with a very noticeable title.

We tried to contact blogspot.com team and told them that the blog content is fake, created by a fake profile most likely with a fake email. According to the Blogger.com, they are a provider of content creation tools, not a mediator of the content.

We can take legal action and subpena blogspot to take the post down, but it will cost us thousands and the developer can create a new profile/post in 10 minutes. We can sue the development company, but they are in India, so even if we win in US court, we still have to go to Indian Court (according to the attorney) and who knows what happens there.

So my questions are:
1) How would you deal with this situation?
2) Is blogspot legally liable for not taking down the profile and posts, if they were asked to investigate authentic identity of the author and took no action?

Thank you