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By Alexis Kramer
April 1 — Online review websites are a significant driver of success for many businesses, particularly small businesses that rely on word-of-mouth marketing. No longer mere conduits for user sentiment, online review sites today solicit, aggregate and promote user reviews, sometimes translating fuzzy consumer sentiments into influential numerical rating systems.
At the same time, review sites have developed advertising models that — for a fee — assist businesses in blunting the harmful effect of negative reviews.
Attorneys speaking March 31 at the Association of National Advertisers' annual Advertising Law and Public Policy conference in Washington discussed the manner in which online publisher immunity is provided by Section 230 of the Communications Decency Act during the nearly two decades that have passed since its enactment. They described the balance between Section 230's effectiveness in meeting its original policy objectives with reliability concerns arising from the websites' aggregation of third-party content.
Business owners have brought and continue to bring claims against review sites such as Yelp, seeking to hold them responsible for defamatory comments written by third-party users regarding their businesses or products. For the most part, review sites have successfully invoked the publisher immunities provided by Section 230 of the CDA, 47 U.S.C. §230.
Congress enacted Section 230 of the CDA in 1996 to “preserve the vibrant and competitive free market that presently exists for the Internet and other interactive computer services, unfettered by Federal or State regulation.”
At the time, online intermediaries generally served as no more than a forum host for online expression. As the Internet progressed, online intermediaries became more involved in third-party content than merely providing a space for users to share ideas.
Section 230(c) of the CDA provides:
(c) Protection for “good Samaritan” blocking and screening of offensive material
(1) Treatment of publisher or speaker
No provider or user of an interactive computer service shall be treated as the publisher or speaker of any information provided by another information content provider.
(2) Civil liability
No provider or user of an interactive computer service shall be held liable on account of—
(A) any action voluntarily taken in good faith to restrict access to or availability of material that the provider or user considers to be obscene, lewd, lascivious, filthy, excessively violent, harassing, or otherwise objectionable, whether or not such material is constitutionally protected; or
(B) any action taken to enable or make available to information content providers or others the technical means to restrict access to material described in paragraph (1).
The CDA defines an “information content provider” as “any person or entity that is responsible, in whole or in part, for the creation or development of information provided through the Internet or any other interactive computer service.”
This safe harbor accordingly precludes websites from liability for claims that treat a website as the publisher or speaker of third-party content. Courts have held that Section 230 immunity applies to a website operator's exercise of “traditional editorial functions,” including screening, editing and removing postings.
Brian Murphy, a partner at Frankfurt Kurnit Klein & Selz PC, told Bloomberg BNA that Section 230 is effective because it provides a strong liability shield for online platforms when members of their community cross a line and post defamatory content. “Online service providers enjoy broad protections, and they only lose those protections when they themselves act as an information content provider,” he said. For example, courts have held that Section 230 protected Yelp from liability for claims concerning its alleged manipulation of user content to favor businesses who purchased its advertising services, as well as its aggregation of user content to create a star rating system for its customers.
In Levitt v. Yelp! Inc, No. 11-17676 (9th Cir. 2014), the U.S. Court of Appeals for the Ninth Circuit affirmed a lower court's ruling that Section 230 protected Yelp from liability for rearranging the order of third-party reviews and highlighting negative comments for customers who did not sign up for its paid advertising service, concluding that the alleged “manipulation” fell within the scope of a “publisher's traditional editorial functions”. The Ninth Circuit also ruled that Yelp's alleged practice of inducing its customers to purchase advertising services did not constitute wrongful extortion.
The Levitt court noted the absence of a “good faith” requirement under Section 230(c)(1), and said that Yelp's motive for determining whether to include comments was irrelevant as to whether Section 230 immunity applied. Imposing a bad faith exception would force review sites to reveal how it decides what to publish on a case-by-case basis and deter them from taking measures to weed out false reviews, Levitt said.
In Kimzey v. Yelp Inc., No. 2:13-cv-01734-RAJ (W.D. Wash. 2014), a district court held that Yelp's star rating system, where Yelp asks reviewers multiple choice questions to help it rate local businesses from one to five stars, did not make Yelp a speaker or publisher of the content because it simply classified comments, created entirely by third parties, into discrete categories. Kimzey said that Yelp's rating system was similar to a matchmaking website's color-coded star rating system, which the Ninth Circuit previously held did not transform the site into an information content provider (Carafano v. Metrosplash Inc., 339 F.3d 1119 (9th Cir. 2003).
Murphy said that he believes Yelp and other review sites are working hard to take steps to weed out reviews that are fraudulent or otherwise not reliable, but that no algorithm will be perfect. Yelp should still be entitled to Section 230 protection for its rearrangement and aggregation of content, he pointed out, despite the possibility that users may rely on unreliable ratings or “bad reviews” missed by Yelp's algorithm. “The theory behind Section 230 is that in order to create an environment that encourages investment in new online technologies that allow for user participation, you need to provide a liability shield — otherwise the threat of potentially crippling liability will chill innovation,” he said.
Anna Marciano, Assistant General Counsel at Heineken USA Inc., said that consumers do not want to be told what to do, where to go, or what to drink. They want to do their own research and decide for themselves, and they do so by looking at the five-star and one-star ratings on Yelp and other review sites, she said.
Review sites accordingly aggregate their user reviews to make it easier for consumers to make their decisions. “Even if the data on review sites isn't perfect, people are relying on it to make purchase decisions,” Murphy said. Aware of this trend, businesses also rely on review sites' aggregation and star ratings to promote themselves.
In an October 2014 decision of the National Advertising Division, an appellate panel recommended that a vacuum cleaner company should discontinue making claims that its product is “America's Most Recommended Vacuum,” or even with a disclaimer that it is “America's Most Recommended Vacuum Brand Online, based on percentage of consumer recommendations for upright vacuums on major national retailer websites through August 2013, U.S. Only,” because the data in support of these claims were not sufficiently reliable or representative of American vacuum cleaner consumers (Appeal of the NAD Final Decision Regarding Advertisers for Euro-Pro Operating LLC - Shark Brand Vacuum Cleaners, No. 196 (N.A.R.B. 2014).
The panel said that it “appreciated the usefulness of online consumer reviews and recognized that consumers increasingly rely on such reviews,” and that “its decision is not intended to preclude the possibility that web-based consumer review data could be aggregated across websites in support of advertising claims.”
Review sites ask different rating questions, reviews cannot always be verified as written by actual purchasers, and some reviews may be for products that are no longer available. Accordingly, absolute reliability on the aggregation of consumer data may be likely impractical.
Murphy noted that the aggregation of data for any particular brand is very different from when ordinary consumers go and look through the reviews and make their own rating determination. For example, a business with a rating of four stars that only has three reviews may not be very representative or reliable with regard to consumer satisfaction, but consumers would only learn that if they took the time to read the reviews. Further, a few fake or incentivized reviews hidden among a list of 50 reviews for a business could greatly bring its average rating down.
Murphy said that he sees a great deal of small businesses struggling with this issue. “A bad review can have a bigger impact on small businesses, like your local dry cleaner or restaurant, than on established companies and brands that are well known to the public,” he said.
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