San Francisco – Online review site Yelp’s star rating system does not make it liable for negative reviews posted on the site because it relies on reviews of businesses from users, a federal appeals court ruled on Monday, dismissing a libel lawsuit filed against Yelp by a Washington state locksmith company owner.
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The 9th U.S. Circuit Court of Appeals said the star rating system that Yelp features is based on users’ input and is not content created by the company that helps guides people to everything from restaurants to plumbers. Under federal law, the decision said, Yelp is not liable for content it gets from its users.
The ruling focused on the libel lawsuit filed by Douglas Kimzey, the owner of a Washington state locksmith business that the court said received a negative review on Yelp in 2011.
Kimzey claimed the negative review about his business was actually about another business, and said Yelp transferred it to his business in an attempt to extort him to pay to advertise with the company.
The appeals court called Kimzey’s allegations “threadbare” and said there were no facts alleging Yelp fabricated content under a third party’s identity.
“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,” said Circuit Judge M. Margaret McKeown, writing for a unanimous three-judge panel decision.
The appeals court has ruled previously that under the 1996 Communications Decency Act, websites that provide “neutral tools” to post material online cannot be held liable for libelous material posted by third parties.
It also dismissed Kimzey’s claim that Yelp should be held liable for distributing reviews to search engines.
The appeals court said distributing the content does not make Yelp the creator or developer of the content.
Kimzey served as his own attorney and said he plans to appeal to a larger court panel.