Crowd-Sourced Review Website May Incur Lanham Act Liability For Selectively Deleting Reviews

MovingStorage

Today’s consumers depend on “crowd-sourced” review websites like Angie’s List and Yelp, which permit users to post and read reviews of goods and services.  Businesses feel a corresponding pressure to encourage favorable reviews on such websites.  But what happens when the website intervenes to regulate the reviews it hosts, perhaps (for example) by deleting reviews that appear phony or suspicious?  Can a business sue the website for deleting reviews that would otherwise reflect positively on its goods or services?

Judge George A. O’Toole, Jr. of the U.S. District Court for the District of Massachusetts recently analyzed this question and ruled that a website could be liable for such deletions, at least in circumstances supporting an inference that the deletion was done in bad faith.  In Moving Storage, Inc., et al. v. Panayotov et al., the plaintiffs were various corporations providing moving services.  The defendants operated a purportedly neutral review website for moving companies, MyMovingReviews.com.  However, the defendants also allegedly operated their own moving business, Xpress Movers.  According to the complaint, the defendants deleted negative reviews of Xpress Movers from MyMovingReviews.com, while simultaneously deleting positive reviews of the other moving companies, including those of the plaintiffs.  The plaintiffs alleged that the defendants were trying to skew the reviews to increase their own market share.  The plaintiffs sued the defendants for false advertising and unfair competition under the Lanham Act and Massachusetts law.

The defendants moved to dismiss, arguing that their actions were immunized under the Communications Decency Act (the “CDA”).  That law immunizes a party from certain claims regarding online activity if: (1) the defendant is a provider or user of an interactive computer service; (2) the claim is based on information provided by another information content provider, i.e., a third party; and (3) the claim would treat the defendant as the publisher or speaker of that information.

The Court denied the motion.  Judge O’Toole held that the claim was not based on the information provided by the third party reviewers, but rather on the defendants’ own alleged manipulation of MyMovingReviews.com by selectively deleting reviews based on viewpoint, while simultaneously representing that the site was a neutral source of accurate information.  The defendants asserted that they merely filtered out inaccurate or phony reviews, thus deleting objectionable content (an action specifically immunized by the CDA if done in good faith).  However, the Court ruled that a determination on that issue was premature, as the complaint adequately pled bad faith.

The Moving Storage decision clearly holds that – at least at the pleading stage – a review website’s decision to delete objectionable reviews is not immunized by the CDA as long as there are plausible allegations that the deletions were made with manipulative intent.  Review websites may wish to consider implementing policies and procedures to prevent the appearance of manipulation or favoritism – factors which may preclude dismissal and/or require a trial.

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