Topic: Legal

Legal side of Reputation Management

When Do Review Websites Commit Extortion?–Icon Health v. ConsumerAffairs 0

Icon Health and Fitness manufactures exercise equipment, such as the well-known NordicTrack. ConsumerAffairs is a review website. Like many other review websites, its business model is predicated on payments from reviewed businesses. However, ConsumerAffairs’ specific practices raise some extra questions. The complaint made the following allegations:

Defendants, through that database, favor product manufacturers who agree to pay a one-time setup fee and an ongoing monthly fee to ConsumerAffairs or Consumers Unified, LLC.

ConsumerAffairs publishes an “Overall Satisfaction Rating” for each product reviewed on its website. The Overall Satisfaction Rating is expressed as a star rating out of five possible stars. ConsumerAffairs calculates the rating based on an unspecified subset of user reviews hosted on ConsumerAffairs’ website. ConsumerAffairs’ chooses which consumer reviews to include in given company’s Overall Satisfaction Rating based solely on whether that company pays a monthly fee to ConsumerAffairs. ConsumerAffairs alters a company’s Overall Satisfaction Rating by intentionally omitting or removing legitimate positive consumer-submitted reviews from pages discussing non-paying companies.

ConsumerAffairs contacted Plaintiff in early 2016 offering to “help” Plaintiff with their business. At that time, ConsumerAffairs rated two of Plaintiff’s
products at approximately one star out of five….ConsumerAffairs sent Plaintiff a Member Accreditation Agreement (“Agreement”). ConsumerAffairs offered to waive a customary $9,000 setup fee and charge Plaintiff an ongoing $3,000 monthly fee in return for certain benefits and services.

The Agreement provides that ConsumerAffairs will remove all negative feedback Plaintiff disputes if: the underlying facts are uncertain, the problem is “resolved,” a consumer does not respond within five days, or the customer’s response is “insufficient.” (Id.) If Plaintiff refused to pay, Plaintiff could not challenge any negative feedback related to its products. Also, ConsumerAffairs allows paying companies to request or compel individual reviewers to change a prior rating, but a nonpaying company cannot do this.

Once a company begins paying ConsumerAffairs, the company’s product pages on ConsumerAffairs’ website change. Prior to paying, ConsumerAffairs superimposes on a given company’s page a prompt stating “Not Impressed With [non-paying brand]? Find a company you can trust” or other language recommending competitors. Also, ConsumerAffairs subtly switches the order of wording on a company’s page from the nonpaying version that states “Top [number] Complaints and Reviews” to the paying version, “Top [number] Reviews and Complaints.”

If these allegations are true, as a consumer I would not consider ConsumerAffairs’ review database management practices credible. Nevertheless, to me, these allegations make it clear that ConsumerAffairs qualifies for Section 230 protection (see also the Fourth Circuit’s Nemet Chevrolet ruling , but see the disastrous Consumer Cellular ruling).

Unfortunately, the court doesn’t know what to do with these allegations. Thus, the court bifurcates its opinion into some general principles about Section 230 and then specific applications on a claim-by-claim basis. The net effect isn’t too bad for ConsumerAffairs, but the opinion has many interstices.

On the plus side, the court properly notes that the possible dubiousness of ConsumerAffairs’ practices is irrelevant to Section 230. Citing Levitt, “the court does not question the motives of the editor….the provision of the CDA on which Defendants rely contains no good-faith requirement.”

On the minus side, the court doesn’t have a rigorous way of distinguishing first-party from third-party content. The court says Section 230 protects the Overall Satisfaction Rating (the star rating) even if ConsumerAffairs allegedly manipulates it by selectively excluding user ratings. The court says the “alleged manipulation relates to editorial and self-regulatory functions because it involves ConsumerAffairs’ decision to remove a review.” In contrast:

The court easily concludes that ConsumerAffairs developed or created the content that originates with ConsumerAffairs rather than any user. For example, Plaintiff alleges that ConsumerAffairs superimposes on product pages: “Not Impressed With [non-paying brand]? Find a company you can trust.” Similarly, the Complaint alleges ConsumerAffairs modifies review pages and search engine results for paying members by changing the order of certain words depending on whether a company has paid ConsumerAffairs. ConsumerAffairs allegedly undertook this action independent of any user review. Thus, Defendants are not entitled to CDA immunity for this conduct.

This discussion implicitly conflicts with Doe v. Backpage, which said that Section 230 protects “features that are part and parcel of the overall design and operation of the website.” The court’s approach also implicitly conflicts with the many Ripoff Report and PissedConsumer rulings that addressed the review sites’ implementation.

Despite this troubling discussion about Section 230, when the court turns to individual causes of action, Section 230 mostly still helps:

Civil RICO. Section 230 preempts the civil RICO claim. As a number of other (uncited) cases have held, the plaintiff can’t find an exception in Section 230’s federal criminal prosecution exception. See, e.g., Doe v. Backpage, MA v. Village Voice, Doe v. Bates, Obado v. Magedson, and Cohen v Facebook. The court also rejects an odd plaintiff argument that Section 230’s state/local preemption language meant that Section 230 doesn’t apply to federal causes of action (of course it does).

Utah Unfair Practices Act. The UUPA only applies to competitors–not the case here.

Utah Unfair Competition. The court says that the plaintiff properly pled extortion under Utah state law: “Defendants do not describe any legitimate benefit they receive for refusing to take down inaccurate reviews, or reviews based on matters already resolved.” The court says the extortion argument does not create a Section 230 problem because “Plaintiff alleges ConsumerAffairs offered to influence individuals posting reviews if Plaintiff agreed to pay ConsumerAffairs an annual fee. Such influence peddling may constitute extortion regardless of whether Defendants are responsible for the initial harmful conduct. Thus, Defendants may be held liable for extortion without being treated as the publisher of any review.”

This ruling may turn on specific language in Utah’s extortion law. Overall, the review-sites-as-extorters argument has generally fared quite poorly over the years. The leading case on the topic is Levitt v. Yelp, which the court discussed in another context but not for the extortion point. See also the AEI v. Ripoff Report ruling. The omission of any compare/contrast to Levitt was puzzling. Otherwise, although I disagree with ConsumerAffairs’ business model, I have a tough time distinguishing ConsumerAffairs’ conduct from many other review sites that generate revenues from the reviewed businesses. Thus, if this ruling takes root, it has the potential to open up review websites to extortion claims that they thought were squelched by the Levitt ruling.

Utah Truth in Advertising Act. “Defendants are immune under the CDA. Plaintiff’s Opposition only suggests the following conduct constitutes advertising: ‘the negative posted review history, the impact of the lack of positive reviews and the bad overall star rating.’ As discussed earlier, Defendants enjoy CDA immunity for publishing third-party reviews. The immunity extends to Defendants’ exercise of editorial discretion, which includes selecting the reviews Defendants will publish, which ultimately affects the Overall Satisfaction Rating.”

Intentional Interference with Prospective Economic Relations. Preempted by Section 230.

Defamation. Section 230 immunity applies to the defamation claims, but the court separately says the defamation claims fail on their prima facie elements too. “Ascribing a number of stars to one’s satisfaction does not convey any objective fact. At most, this rating conveys a subjective notion of a user’s, or group of users’, satisfaction with a product.” Also:

the court finds the statements ConsumerAffairs makes on its website relate to matters of opinion protected under the Utah Constitution. Additionally, the court briefly discusses Plaintiff’s reference to its alleged higher rating on another review site. This argument merely highlights the subjective nature of reviews. It offers no objective fact because Plaintiff cannot demonstrate that either review is objectively correct. By adopting Plaintiff’s position that differing reviews on two websites present the basis for a lawsuit, the court would force product-review websites to face litigation unless they afford equal ratings to all reviewed products and companies. This position is untenable under any conception of the First Amendment. Review sites and their users may offer opinions regardless of whether those opinions are consistent with those of other reviewers. Such opinions are protected by the Utah Constitution and the United States Constitution.

Case citation: Icon Health and Fitness v. ConsumerAffairs.com, 2017 WL 2728413 (D. Utah June 23, 2017).


Source: Eric Goldman Legal

Facebook Persistent Tracking Lawsuit Crashes Again 0

Screen Shot 2017-07-13 at 7.50.28 AMThis is a lawsuit based on Facebook’s tracking of users while they are logged out. The code for a “like” button implemented by third parties apparently causes the browser of a consumer visiting the third party page to send a background request to Facebook servers. This request includes the URL of the third party page in question and also the contents of the cookie placed by Facebook on the user’s browser. The net result is that Facebook is able to track any visits by users of third party websites that contain a like button, whether or not the user is logged in to Facebook.

The court previously dismissed the complaint with leave to amend. It dismisses the complaint a second time, also with leave to amend.

Standing: The court says plaintiffs have statutory standing based on their statutory claims. Their claims for invasion of privacy and breach of contract get past the standing hurdle. The one exception is plaintiffs’ claim under section 502 (California’s version of the CFAA). The court says that this claim requires a showing of damages, and plaintiffs’ vague allegations of economic harm (loss of sales value of their personal information) is insufficient. In response to the court’s previous dismissal of this claim, plaintiffs added claims for fraud and larceny, but the court says this does not change the standing analysis.

Wiretap and SCA claims: The Wiretap Act claims fail because Facebook did not intercept a communication to which it was not a party. The code in question (that plaintiffs are complaining about) actually communicated with Facebook’s servers. Since Facebook is a party to this communication, it cannot have violated the wiretap statute. As to the SCA claim, the court says there’s nothing “in storage” that Facebook accessed. Plaintiffs first pointed to the cookie as being the thing in storage, but the court rejected this. The second time around, plaintiffs point to the URLs in question. The court says that URLs are not stored incident to transmission but are stored for the user’s own convenience (for example if the user wishes to look up their own browser history). The court also notes that a user’s personal computer is not a “facility” under the Stored Communications Act.

Invasion of Privacy: This claim requires a plaintiff to show that Facebook intruded in a way that is “highly offensive”. Citing to a string of cases rejecting this argument in the online tracking and email scanning contexts, the court says plaintiffs can’t make out an invasion of privacy claim under California law.

Breach of Contract: Plaintiffs tried to rely on Facebook’s “help pages” and matters outside the terms of service to cobble together a contract claim. The court says plaintiffs’ allegations are too vague: they fail to point to the specific terms they allege Facebook breached. The court also says that a breach of the duty of good faith has to be premised on a contract term and plaintiffs can’t use this claim to import new terms into the agreement.

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There’s not a lot to say about this beyond what I mentioned in the blog post from late 2015: “Facebook Beats Privacy Lawsuit Alleging Persistent Tracking”. (Starting from scratch two years into a lawsuit can’t bode well for overall profitability.)

A noteworthy part of the opinion relates to Facebook’s discussion of Facebook’s P3P policy, or lack thereof. Facebook apparently maintained a P3P policy that signaled that its policy “references a law that may determine remedies for breaches of their privacy policy and that there are ways to resolve privacy-related disputes.” Plaintiffs said this was inaccurate. Facebook also changed its P3P policy, saying that the protocol “does not allow a rich enough description to accurately reference [its] privacy policy.” In any event, the court says this is all a red herring because plaintiffs failed to allege that any plaintiff used versions of internet explorer that implemented P3P. The court also says that P3P is voluntary: “Facebook can choose to establish a machine-readable version of its privacy policy, but it has no legal duty to do so.” As the ruling confirms, P3P was an effort that never really got off the ground.

Facebook famously settled the Beacon lawsuit in 2009. (Has it really been that long?!) Since then, it appears to have decided to litigate rather than settle privacy lawsuits. And looks like it has a pretty good track record doing so.

Eric’s Comments:

1) Given that the P3P “standard” flamed out so long ago, it was jarring to see a 2017 discussion about the legal implications of a P3P policy. (The only other time we’ve blogged on the topic was the Del Vecchio v. Amazon case 5 years ago). I’m amazed any website still had a P3P policy in place in the past decade. If your site still has a P3P policy online, why?

2) It’s uncool for an online service to track logged out users. I feel that way even if the service discloses this fact–and even if it lets users opt-out. (Opt-ins are OK with me, but why would anyone do that?). I’m talking about you, too, Uber.

Case citation: In re Facebook Internet Tracking Litigation, 5:12-md-02314-EDJ, 2017 US Dist. LEXIS 102464 (N.D. Cal. June 30, 2017)

Related posts:

Facebook Beats Privacy Lawsuit Alleging Persistent Tracking

Disclosing Unique User IDs In URLs Doesn’t Violate ECPA–In re Zynga/Facebook

Judge Koh Puts the Kibosh on LinkedIn Referral ID Class Action — Low v. LinkedIn

The Cookie Crumbles for Amazon Privacy Plaintiffs – Del Vecchio v. Amazon

A Look at the Commercial Privacy Bill of Rights Act of 2011

Flash Cookies Lawsuit Tossed for Lack of Harm–La Court v. Specific Media

Judge Recognizes Loss of Value to PII as Basis of Standing for Data Breach Plaintiff — Claridge v. RockYou

Another Lawsuit over Flash Cookies Fails — Bose v. Interclick

LinkedIn Beats Referrer URL Privacy Class Action on Article III Standing Grounds–Low v. LinkedIn

The Cookie Crumbles for Amazon Privacy Plaintiffs – Del Vecchio v. Amazon

Facebook and Zynga Privacy Litigation Dismissed With Prejudice [Catch up Post]


Source: Eric Goldman Legal

Attorney Aaron Minc interview on Cleveland News 5 0

Ohio failed to pass Bill 353 to join 38 other states and Washington DC to criminalize Revenge Porn.  Mona Kosar from Cleveland 5 news interviews Aaron Minc about this and the latest Revenge Porn making headlines between Rob Kardashian and his former fiancee Blac Chyna after he leaked nude photos of her and posted defamatory tweets and […]

The post Attorney Aaron Minc interview on Cleveland News 5 appeared first on Defamation Removal Law.


Source: Aaron Minc

What Is Tortious Interference? 0

Tortious interference is one of those legal terms that sounds a lot more complicated than it is. Bryan A. Garner, the author of the Dictionary of Modern Legal Usage, once explained the concept to the legendary New York Times wordsmith William Safire.  “Say you had a contract with Joe Blow, and I for some reason […]

The post What Is Tortious Interference? appeared first on Defamation Removal Law.


Source: Aaron Minc

Is It Legal To Post Online Reviews Of My Product? 0

is it legal to post reviews of your own productsWe regularly work with online product sellers, so people often ask: Can I post online reviews of my products? We answer: Only if you prominently disclose your connection to the product. Because it’s against FTC regulations to litter the Internet with phony product reviews that appear impartial but aren’t.

Note: Officials regularly execute fake review stings. In fact, the Federal Trade Commission recently censured a trampoline company for the offense.

What happened? Well, a trampoline company — which we’ll call “Acme Bounce” (not real name) — presumably wanted to boost sales. To shorten a long story, representatives from the company allegedly bought some domains. According to reports, those websites present as impartial-trampoline review sites featuring “expert” advice. “Acme Bounce” regularly received top marks on said sites.

Well, things weren’t necessarily as they appeared. To shorten a long story, according to the FTC, “[One of the trampoline review websites] was operated by [Acme Bounce] and the company owners.” Additionally, some of the comments on the sites were “not authentic,” and instead “created by the owners of [Acme Bounce].”

In the end, “Acme Bounce” had to pay a sizable fine and agree to certain provisions.

The Four Main Rules Of Online Reviews

Steer clear of an FTC online review-related conflict by following these five rules.

  • Don’t write and post reviews of your products under another person’s name to make it appear like it’s a neutral consumer. If you post a review of your own product, the first line of said review should be something along the lines of, “I am {NAME}, the person who sells this product.”
  • If you give your product away in exchange for a fair review, the reviewers must disclose any material benefit received in exchange for posting an “honest opinion.” If you sell on Amazon, note that any type of incentivized review is off limits. [LINK]
  • Understand that if you hire a marketing company to promote your products, you’re responsible for said promotional company’s actions. The “I didn’t know what they were doing” argument doesn’t work when it comes to unfair and deceptive marketing. [LINK]
  • Remember: Factual claims made in promotional materials must be backed up with data and test results.

Click here for a full list of online marketing Do’s-and-Don’ts. [LINK]

Connect With An Online Product Marketing Attorney

Are you grappling with an online marketing or online sales issue? Perhaps you want to avoid future pitfalls and are looking someone to perform and online marketing audit? Either way, our team has considerable experience working with brands and professional marketers. Get in touch today to begin the conversation.

Article Sources

(2017, June 8). FTC Tramples Fake Reviews. Retrieved July 07, 2017, from http://www.jdsupra.com/legalnews/ftc-tramples-fake-reviews-74147/

Davis, W. (2017, May 31). FTC Charges Trampoline Sellers With Creating Fake Review Sites. Retrieved July 07, 2017, from https://www.mediapost.com/publications/article/302115/ftc-charges-trampoline-sellers-with-creating-fake.html

The post Is It Legal To Post Online Reviews Of My Product? appeared first on Kelly / Warner Law | Defamation Law, Internet Law, Business Law.


Source: Kelly Warner Law