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