Posted by Steven Otto.
The San Francisco rating company, Yelp, is not found liable for negative reviews posted on its site. This is because it relies on ratings posted by users, not the company itself. A federal appeals court on Monday, September 12, dismissed a libel lawsuit filed against Yelp by Douglas Kimzey, the owner of a Washington state locksmith company. The 9th U.S. Circuit Court of Appeals ruled that, under federal law, Yelp is not liable for content it gets from its users. The features of Yelp are based on users’ input and it is not content created by the company, whose site helps guide people to anything from restaurants to plumbers and much more.
The court said that Douglas Kimzey’s business received a negative review on Yelp in 2011. Kimzey claimed that the negative review was actually meant for another business, and claimed that Yelp transferred the review to his business on purpose in an attempt to extort him. He claims that Yelp was trying to force him into paying to advertise with Yelp. The appeals court said that his allegations were not substantial and that there were no facts at all supporting Yelp fabricating content under a third party’s identity. Circuit Judge M. Margaret McKeown, writing for a unanimous three-judge panel decision, said “We fail to see how Yelp’s rating system, which is based on rating inputs from third parties and which reduces this information into a single, aggregate metric, is anything other than user-generated data.”
The appeals court previously ruled under the 1996 Communications Decency Act that “websites that provide what are known as ‘neutral tools’ to post material online cannot be held liable for libelous material posted by third parties.” Kimzey’s claim that Yelp should be held liable for distributing reviews to search engines was dismissed by this act. The appeals court stated that distributing the content does not make Yelp the creator or developer of the content.
Aaron Schur, Yelp’s senior director of litigation, said the appeals court “rightly confirmed Yelp’s ability to provide a forum for millions of consumers to share their experiences with local businesses.” Kimzey said he lost 95% of his business after getting one star on Yelp and said, “If you have a one-star rating, people won’t go near it (the business). They don’t care if you’ve been in business for one week or 25 years.” Obviously upset over what had occurred to him and the ruling, Kimzey, serving as his own attorney, plans to appeal to a larger court panel.
Steven is an accounting major at the Feliciano School of Business, Montclair State University, Class of 2019.