Retailers are familiar with Yelp.com as a ratings website with a star rating system that allows customers to rate products and services they receive, as well as add individual reviews and comments. Positive reviews can generate business for retailers, and negative reviews can be a source of concern.

The Ninth Circuit Court of Appeals has ruled, however, that Yelp’s multiple-choice star rating system does not make the review site a publisher or provider of allegedly defamatory content that may be subject to liability. In Kimzey v. Yelp! Inc., the Ninth Circuit affirmed dismissal of an action by a small business owner seeking to hold Yelp liable for a one-star rating by a third party, and challenging Yelp’s immunity under Section 230 of the Communications Decency Act of 1996.

Section 230 Immunizes Interactive Service Providers From Liability

Under Section 230, a provider of an “interactive computer service” is immune from liability for allegedly defamatory comments and content by third parties. This is how service providers such as Google, Youtube, and Facebook are able to host user content and comments without being held liable for defamatory comments and content posted by third parties.

The Ninth Circuit held that Yelp clearly falls under Section 230’s immunity. It rejected Kimzey’s arguments that Yelp created or developed content by causing a review from another site to appear on its page, and that providing a star-rating feature and causing the allegedly defamatory statement to appear as a promotion on Google’s search engine transformed the review into Yelp’s own content.

However, Section 230 does not necessarily immunize a service provider from having to take down a defamatory post. In June of this year, in Hassell v. Bird, the California Court of Appeal held that Section 230 immunity did not bar Yelp from having to comply with an order to remove a defamatory review, even though Yelp’s site allows reviewers to remove their own reviews.

Recommendations for Responding to Negative Reviews

Yelp offers the following recommendations to retailers and others concerned about negative reviews.

  • Keep it simple and polite. Users appreciate honesty and like to know when businesses are making changes based on their feedback.
  • Sometimes it’s to your advantage not to comment at all.
  • Yelp recommends trying to resolve issues through direct messaging first. If you feel a public comment is necessary, present your case as simply and politely as possible, and do not attack the reviewer under any circumstances.
  • Remember that potential customers will be reading your comments and you want to leave them with a positive impression of your business.