Virginia Court Pierces Anonymity of Critical Customer Postings

January 20, 2014

Yelp pierce corporate veilIn a recent decision, the Virginia Court of Appeals ordered the website, Yelp, to disclose the identity of the individuals who posted seven reviews critical of a local business anonymously.  The ruling adds another level to the continuing battle over rights of anonymous expression in the online marketplace.

Hadeed Carpet Cleaning was the target of seven anonymous reviews posted on Yelp.  The reviews were critical of the company’s business practices and advertising.  In response, the company claimed the reviews were posted by individuals who were not actual customers.

The company issued a subpoena to Yelp demanding the actual identities of the individuals associated with the seven postings.  Yelp contested the subpoena.  The trial judge ordered Yelp to comply with the demand.  On review, the majority of the Virginia Court of Appeals panel reviewing the case agreed with the trial judge.

Yelp’s terms of service prohibit the posting of reviews by non-customers.  Thus, if the facts are consistent with the Hadeed allegations, then the conduct in question was a violation of Yelp’s requirements.

Counsel for Hadeed also notes that Yelp routinely “hides” reviews from public access when it questions the authenticity of those comments or if the comments otherwise appear to violate the Yelp terms of service.  Reportedly, there are currently 88 such hidden reviews involving Hadeed Carpet Cleaning, thus the company contends that Yelp has previously recognized that the company is often the target of suspect reviews.

The Virginia code includes a provision that authorizes judges to require disclosure of the identity of parties who create anonymous communications when those communications may constitute some form of illegal or legally actionable conduct.  In this case, the majority of the Court of Appeals panel was persuaded that there was adequate reason to believe actionable conduct had occurred.

Critics of the Virginia court ruling fear that it represents an erosion of protection for free expression online.  Supporters suggest that the specific facts associated with this case limit its impact to contexts in which there is good faith doubt regarding the authenticity of critical postings.

This case underscores the complexity of user commentary on products and services.  Reviews from actual customers provide valuable and important information to the businesses involved and to consumers.  Facilitating active consumer commentary is an important element of a dynamic marketplace.

Yet it is also vital that the information provided to consumers be accurate.  False and deceptive commentary harms both businesses and consumers.  Regulators, courts, and businesses such as Yelp that provide forums for consumer reviews must strike an effective balance between efforts to foster open and frank expression of opinion and actions that ensure that posted comments are accurate and not misleading.