Yelp.com: Democracy on the Web or a License to Libel? Rising Litigation Over Online Consumer Reviews
February, 2009
Fed up with what he thought was an unfair attack on his business, San Francisco chiropractor Steven Biegel sued the author of a negative review posted on Yelp.com claiming that he had been defamed and painted in a false light. The lawsuit quickly settled, but not before the tech-savvy defendant launched a website to publicize the case, drawing unwanted media attention to the chiropractor; and not before the chiropractor risked having his case dismissed along with an order requiring him to pay the defendant's attorneys' fees.
The growing popularity of consumer review websites such as Yelp.com has provided consumers with a powerful new tool for evaluating and critiquing businesses they patronize. Sites such as Yelp.com have also become a powerful method for skillful business owners to generate positive word-of-mouth and entice new customers to their business. However, this brave new world of consumer review websites is fraught with peril for consumers, business owners and the websites themselves, spawning a rising tide of litigation.
While business owners stung by negative criticism may be inclined to sue both the reviewer and the website that publicized the review, they would be wise to exercise caution before jumping into the legal fray. Aside from the negative publicity that such a lawsuit might engender, California business owners thinking of suing need to consider the effect of California Code of Civil Procedure §425.16, known as the Anti-SLAPP provisions (Strategic Lawsuits Against Public Participation). Section 425.16 allows a defendant sued for comments made in a public forum concerning issues of public interest to seek dismissal of the lawsuit and, if successful, to recover from the plaintiff the attorneys' fees incurred in defending the suit. Although a recent California Court of Appeals decision has questioned whether online commentary about a local business constitutes an issue of public concern, other courts have affirmed the application of §425.16 to online postings, offering support for defendants resisting such suits. Plaintiffs can survive an Anti-SLAPP motion if they can show a likelihood of success on the merits, but because they could be stuck paying the defendant's attorneys fees, business owners must carefully evaluate the merits of their claim before taking legal action.
Website owners are generally immune from lawsuits that seek to hold them liable for comments posted by their users under §230 of the Communications Decency Act. However, recent court decisions, such as a recent case involving Craigslist.com and another involving the online housing service Roommates.com, have held that immunity is not absolute, and that website owners can be held liable where the website can be said to have contributed to or encouraged unlawful conduct by its users. Thus, website owners must be careful not to encourage their users to engage in unlawful conduct and should not assume that they will be immune from lawsuits in all cases.
Finally, consumers - and for that matter, rival business owners, disgruntled former employees and anyone else with an axe to grind - who post reviews online should think carefully before posting comments that include false statements of fact or use deceptive means. Although California's Anti-SLAPP provision offers unique and powerful protections for free speech, the law will generally not protect speech grounded in untrue facts.
For more information concerning your legal rights in this rapidly evolving area of law, please contact a member of Bullivant's experienced Intellectual Property team to discuss specific concerns regarding the effect of this case on your business.