Yelp does not have to identify seven online reviewers who posted critical comments about a carpet cleaning business, the Virginia Supreme Court recently ruled (PDF).
Based on procedural grounds, this ruling is viewed as a big win for Free Speech. However, there are clear implications for small businesses too.
With no single set of laws in place to determine whether anonymous online comments are protected by the First Amendment or not, the landscape is constantly evolving. Small business owners need to understand privacy laws in the states in which they conduct business.
Virginia courts lack jurisdiction to subpoena Yelp’s data because the information is in California, where the company, an online publisher of crowdsourced reviews about local businesses, is based, the court ruled.
Joseph Hadeed, owner of Hadeed Carpet Cleaning, sued seven anonymous Yelp reviewers critical of his company in 2012. Hadeed alleged that his revenue was hurt because of the comments and that the people posting them were really competitors pretending to be Hadeed’s customers.
Allegations of fake reviews on Yelp are nothing new. In November of 2014, an independent study claimed that 16 percent of Yelp reviews could be fakes. In September 2013, Yelp filed suit against a law firm claiming it had created fake reviews for self-promotion.
Around the same time, the New York Attorney General leveled $300,000 in fines against 19 businesses alleged to have created and disseminated deceptive reviews on sites like Google Maps, Yelp and CitySearch.
In Hadeed’s lawsuit, defendants named “John Doe” were charged with defamation, and Yelp received subpoenas demanding the names of the seven reviewers.
Yelp’s response was that the reviewers had a First Amendment right to post anonymously — unless Hadeed proved they truly were competitors rather than customers. Several of the reviewers tied to the lawsuit filed (PDF) an Amicus brief confirming that they were actual Hadeed Carpet Cleaning customers and that their critical reviews were truthful.
Hadeed actually had won the support of a Virginia trial court and the Court of Appeals, which held Yelp in contempt for failing to reveal the reviewers’ identities. But the business owner ultimately lost his case when the Virginia Supreme Court vacated the lower court decisions on procedural grounds. As state rule stands, the Virginia trial court could not order Yelp, based in another state, to produce the documents, also located in California.
As the blog Socially Aware notes:
“The Virginia Supreme Court did not address the broader First Amendment argument about anonymous posting and noted that it wouldn’t quash the subpoena because Hadeed could still try to enforce it under California law.”
If so, Yelp says it will continue to upload the anonymity of reviewers. On the official Yelp blog, senior director of litigation, Aaron Schur, explains:
“If Hadeed wishes to issue a subpoena in the correct jurisdiction of California, we are happy to continue to fight for the rights of these reviewers under the reasonable standards that California courts, and the First Amendment, require (standards we pushed the Virginia courts to adopt). This case highlights the need for stronger online free speech protection in Virginia and across the country … ”
If Hadeed does attempt to enforce the subpoena in California, he may face the same result, only on different grounds. While Yelp would be subjected to a court’s subpoena power, it likely would find protection in California court rulings which defend anonymous speech under the U.S. Constitution’s First Amendment as well as the state’s constitutional right of privacy.
Socially Aware explains:
“There is no uniform rule as to whether companies must reveal identifying information of their anonymous users.”
Companies continue to face legal proceedings involving the identification of anonymous users.
In 2013, in Chevron v. Danziger, Northern District of California federal Magistrate Judge Nathanael M. Cousins ruled (PDF) that Chevron’s subpoenas seeking information about Gmail and Yahoo Mail users were enforceable against Google and Yahoo, respectively. The subpoenas in this case were not aimed at “expressive activity” but rather sought out subscriber and user information associated with email addresses.
Twitter prevailed in a recent case, last month, when Northern District of California Magistrate Judge Laurel Beeler ruled (PDF) that plaintiffs could not compel Twitter to identify certain anonymous users. Music Group Macao sued the defendants in Washington federal court over anonymous tweets that the company believed were disparaging to its brand, its employees and CEO. The Washington court ruled in the company’s favor, against Twitter. But Magistrate Judge Bheeler concluded that the defendants’ First Amendment rights to speak anonymously overshadowed the company’s need to identify them.
Federal courts in some states make it difficult for plaintiffs at the outset when filing lawsuits seeking to identify online anonymity. Connecticut and New York require plaintiffs to include sufficient corroborating evidence to support their claims seeking to identify anonymous online posters.
In some states, the bar is even higher for plaintiffs. The Delaware Supreme Court applies one of the highest standards, having ruled that “setting the standard too low will chill potential posters from exercising their First Amendment right to speak anonymously.”
Socially Aware adds:
“These cases show that courts are continuing to grapple with social media as a platform for expressive activity … this area of law remains unsettled, and companies with social media presence should be familiar with the free speech and privacy law in the states where they conduct business and monitor courts’ treatment of these evolving issues.”
Yelp photo via Shutterstock
I think it is just right top protect their identity. Although there is an issue here of competition posting reviews as it can be a tool to post bad reviews about competing companies.
This is happening everywhere in USA, probably in any country.
Yelp is just hurting local business, not helping.
More evil than Google.
The headline is misleading. The court did not order that the identity of the reviewers be protected. A lower court and the supreme court ruled that the identity of the reviewers must be revealed and held Yelp in contempt for not revealing them.
This is not about freedom of speech. It is about truth and validity of reviews. The vendor proved that to the satisfaction of the court that the reviewers were not customers and their intent was not to inform the public, but to cause harm to the business. When someone hides behind a fake name, who misrepresents themselves as a customer, then they are not entitled freedom of speech protection. Yelp probably refused to provide the names of the reviewers because if it did, Yelp would probably be liable for damages to the company for publishing fake reviews. If nothing else, they would lose the the trust of the public.
Yelp has spent millions of dollars to protect the identities of its reviewers; however, on CNBC Fast Money when criticized for its business practices, Yelp revealed the user name, the review and the name of business that Kaylie Milliken (Billion Dollar Bully) had written. It also misrepresented the relationship Ms. Milliken had with the business. Yelp said she had reviewed her husband’s business, but at the time she was a client and only later married the owner of the business. She was a more legitimate reviewer than those who reviewed the carpet company. In other words, if you are catering to the dictates of Yelp, you have their protection, but raise a finger against them and they will cast you out on a minute’s notice. It is ironic that Yelp would protect fake reviewers, but readily reveal the identity of a proven legitimate reviewer.
In the end, Yelp did not win this case. It was thrown out on a technicality of jurisdiction. Yelp was able to bring pressure on the court to reconsider the verdict and they caved under pressure. This was not a victory for anyone, but another example of Yelp’s ability to manipulate the legal system in a field that it too new for our court system to effectively manage. The article misrepresents the case and its impact.
I understand how small business owners feel. I have had 8 years of solid great reviews for my business on a variety of platforms, not just Yelp, yet one nasty woman ruined it all in one hour. Yelp did nothing to help, notwithstanding the obvious vindictiveness of this person’s review, which was totally out of context from all previous reviews. I will never use Yelp again and have removed their link from my website, as there are NO protections against one bad apple making a business person look very bad. I have a good reputation, and yet one crazy client can do this to me without me being able to get it removed. I could understand if there were ANY other bad reviews but there were not. Eight years worth of not.
How can one bad review “ruin 8 years of solid great reviews?” If you have a lot of reviews and they are all good, IDK wth you are complaining about. Most people look at the general trend. If I see one sour review and 20 good reviews, I’m going to ignore the bad review. If I see 20 bad reviews, complaining about the same thing and 1 good review, I’m going to listen to the majority. I’m Yelp Elite and I’ve written some reviews of terrible places and thing that fascinates me is that sometimes business owners refuse to believe that their service was terrible (I think their pride is hurt) and will argue with you about it endlessly. Newsflash! Just because you own a business doesn’t mean that your product or service is the best in the universe!
That’s a tough one. Both sides have a valid argument. I don’t want people to feel threatened for posting, but if competitors are allowed to post false reviews it creates an imbalance in the industry.
Not ALL speech is protected by the 1st Amendment. You can’t yell FIRE in a theater, You can’t threaten the life of the US President, You can’t libel/defame. That’s what this case is all about – defaming a business (Yelp being the enabler). Repeatedly Yelp’s legal team has steered clear of any damaging verdicts – using “technicalities” to rule the day. Justice, however, is not always found in a courtroom. While winning legal battles, Yelp is losing the war. Their reputation of being anti-small business has earned them the title of “Billion Dollar Bully”. 80% of Yelp’s revenues come from small business owners advertising on Yelp – so it’s little wonder WHY Yelp’s growth is slowing and Wall Street is dumping Yelp stock.
Irony: Yelp has a 2.5 star rating (on their own yelp page) and appears to be failing as a business. Hey Yelp – why don’t you LISTEN to your customers!? In case you forgot… Yelp users ARENT your customers… small business owners who buy advertising – THOSE are your customers.
Valuable writing – I learned a lot from the analysis ! Does someone know where I might be able to obtain a template CA SUBP-030 copy to work with ?