Here’s another one from the “fake testimonials” file — but this time, the tables are turned. Instead of a business trying to sue Yelp over a scathing review, Yelp is suing a law firm for allegedly posting fake – yet glowing – reviews under their own entry.
Yes, my friend, you read that correctly: Yelp is now on the hunt for businesses that are padding their pages with adulatory, although ultimately phony, testimonials. (Maybe Yelp is tired of angry business owners looking to pick a fight over user reviews?)
The timing of this case is almost prescient, as New York State recently passed a ground-breaking law which categorizes faux-laudatory reviews – especially ones you and your employees write yourselves – as false advertising, and therefore illegal.
Law firm Being Sued by Yelp for Fake, Positive Online Reviews
This Yelp v. Vendor defamation fracas began when someone left a poor review on McMillan’s Yelp page. After the lone less-than-flattering comment appeared, Yelp staffers noticed a flood of A+ praise on McMillan’s profile. Suspicion led to an internal investigation at Yelp, and in the end, Yelp opted to sue the law firm for breach of contract, intentional interference with contractual relations and false advertising.
Word on the street is that Yelp believes McMillan is part of a “good testimonial mafia ring” of sorts, wherein participating parties agree to give each other positive online reviews and testimonials despite having never actually used a given service or product. An “I’ll scratch your back if you scratch mine” understanding – which, till now, has always been a standard online marketing tactic.
Why is Yelp Taking The Time To Sue A Law Firm For Defamation?
You may be wondering, “why is Yelp even bothering with this lawsuit!? Shouldn’t they worry about providing a better online experience instead of suing users?” In response to that question, the company’s line seems to be, “bad reviews are bad for both Yelp and consumers.”
But what isn’t being widely highlighted is that this is not McMillan’s and Yelp’s first legal conflict – with each other, no less. Several years ago, McMillan won $2,700 from Yelp. The law firm had initiated a legal action against the online review corporation over language in Yelp’s vendor contract. Ironically, McMillan protested to what they felt amounted to Yelp extorting businesses for good reviews. Though the firm ultimately won money from the consumer-venting pioneers, much to the chagrin of McMillan, the matter was forced into arbitration because of a clause in the Yelp vendor agreement. (Click here to read more about the difficulty of getting an arbitration clause ignored when a legal matter arises.)
Bottom Line: Are fake testimonials Legal?
This lawsuit comes at a time when lawmakers are cracking down on paid-for, fake and defamatory reviews. As stated above, New York State recently passed a law stipulating that self-reviews of a business or product are akin to false advertising and therefore illegal in the Empire State – a law which most website operators will need to follow since the Internet is, essentially, one big state, where the wise follow the strictest laws in the country.
The Time Is Now To Clean Up Your Testimonial/Review Act
The bottom line is simple: if, in the past five years or so, you have bought, bartered or self-produced bogus testimonials for your business, service or product, it’s time to start cleaning up the now-offending material. Delete the reviews you wrote and posted yourself. If you use a marketing firm, get in touch with them, calmly discuss the new crop of fake testimonial laws, and work with them to develop a plan for moving forward.
Want to consult with an online marketing lawyer about your possibly illegal, fake testimonial situation? Get in touch with Aaron Kelly at Kelly Warner Law.
A Utah ISP operator is engaging in a little civil disobedience when it comes to warrant-less subpoenas. He contends they’re unconstitutional – and he may have a point. But if state prosecutors pursue action against the ISP, they may end up shooting themselves in the foot. A tricky legal standoff, indeed.
ISP Provider Says, “No Way” To Warrant-less Subpoenas
Internet service providers are often asked by law enforcement officials — and prosecutors — to provide information about their users. Since the Internet has become an integral part of our daily existence, many states have passed laws that allow for expeditious turnaround times for subpoenas requesting identifying information from ISPs. Most jurisdictions achieved this by authorizing the use of administrative subpoenas, which eliminate the need for a judge’s approval.
Utah has a warrant-less subpoena policy. Enacted in 2009, the law has given way to approximately 1,200 warrant-less subpoena requests. Under the statute, authorized individuals can use warrant-less subpoenas for names, addresses, phone records and “other information about suspected child predators.” Prosecutors can get basic information via administrative subpoenas, but they cannot get detailed data. For example, they can request a phone number from an ISP, but they can’t request the transcript of phone calls made on said number. And while the law states noncompliance can result in a contempt of court charges and jail time, officials have yet to enforce the statute.
Enter Mr. Pete Ashdown – founder of Utah-based ISP, Xmission. While Mr. Ashdown is eager to help bring down bad guys, he isn’t keen on unconstitutional laws. And in the opinion of Ashdown, Utah’s warrant-less subpoena system is a clear violation of the Fourth Amendment, which guards against unreasonable search and seizure. As such, he’s chosen not to comply with subpoena requests.
Ashdown’s resistance presents a problem for prosecutors. While the law gives them the ability to bring contempt of court charges against parties that do not comply with the program, in doing so, they also risk a lawsuit. If it’s decided during said hypothetical lawsuit that the administrative subpoena law is unconstitutional, prosecutors will lose an arrow from their quivers. And since most ISPs readily adhere to the law, going through with a test case is a dangerous proposition for law enforcement officials.
Ashdown says, however, that he is up for a test case and doesn’t seem too concerned about being jailed for civil subpoena disobedience. For as he succinctly pointed out, “When there’s no court involved, I don’t see how they can hold us in contempt of court.”
Administrative Subpoenas, However, Do Help In Catching Seriously Bad Dudes
To be fair, administrative subpoenas are effective in stopping child pornographers and kidnappers. For example, the Utah Internet Crimes Against Children task force says information obtained through an administrative subpoena helped track down a girl who had been kidnapped to California and was an hour away from being smuggled into Mexico.
That said, when prosecutors request information via warrant-less subpoenas, they don’t provide much insight as to why the information is needed. What if officials were using the data to spy on innocent citizens? That, at least, is the lingering question for many people, including Mr. Ashdown.
Former UCLA basketball player Reeves Nelson’s defamation lawsuit against Sports Illustrated was recently dismissed by the Los Angeles Superior Court. The case stemmed from an article written by Pulitzer Prize winning author George Dohrmann entitled “Not The UCLA Way.” It appeared in the March 5, 2012 edition of the magazine.
I haven’t read the article, but according to reports, Dohrmann characterized Nelson as a player with “poor behavior” who was let go from the team because of it. Not pleased with the description, Nelson filed a defamation lawsuit in Los Angeles Superior Court.
To make a long story short, the judge ruled that Dohrmann had done extensive research and did not defame the athlete. The defamation case was dismissed.
Possible Reasons Why A Disparaging Statement May Not Be Defamatory
In order to win a defamation lawsuit in the United States, a plaintiff must prove the following:
- The statements in question was untruthful and harmed a reputation or that of a business;
- The statement was communicated to others; and
- The defendant(s) knowingly made a false statement with the intent to harm.
If one of the above can’t be proved, there’s a good chance a judge will dismiss the case or a jury will rule in favor of the defendant.
Perhaps the most important thing to remember is that opinion, 99% of the time in United States defamation cases, is not found to be defamatory.
Are Defamation Lawsuits Brought Against Bloggers Likely To Be Dismissed Since Bloggers Usually Just Give Their Opinions?
It isn’t true that bloggers can’t be sued for defamation. While it’s true that many bloggers shoot from the hip and speak their mind, defamation is defamation – and bloggers can be charged. In fact, since the rise of the Internet, bloggers have surpassed print journalists in losing civil defamation lawsuits.
To put it plainly, defamation laws in the United States favor the first amendment and professional journalists, who usually engage in serious due diligence, are able to present strong defenses when faced with libel or slander charges. While it does happen, it’s rare to see a trained journalist lose a libel lawsuit in the United States.
Bloggers, on the other hand, lose defamation lawsuits more often than professional reporters; mainly because of a lack of due diligence and a tendency for bloggers to be more aggressive in their language and reporting. Now, that is not to say that there aren’t bloggers who adhere to strict standards; they absolutely exist. It’s just that the sheer volume of bloggers means more room for error in the field.
Figure Out If You Can Sue For Defamation
Before you decide to consult with a defamation lawyer, you may want to check a few basic elements to get a better idea if you even have a case.
- First check to see if the defamation statutes of limitations has run out in your jurisdiction if you’re filing in a state court. Check with a defamation lawyer to find out if you can sue in a federal court.
- If the statements in question were said in confidence, and therefore considered privileged, you may not have a case in some states. Check out this database of defamation laws in the 50 United States to see how your state deals with privileged comments as it relates to defamation.
- You don’t want your case dismissed outright, so make sure you have evidence proving that the statements in question are (a) false and (b) caused you harm. If your business is suffering, gather receivables to illustrate the downward trend and how it started around the time the defamatory information was published.
Once you’ve done those three things, and feel you’re ready to move forward with a claim, it’s time to contact a defamation lawyer. You also have the option of representing yourself – which is considered filing a pro se defamation of character lawsuit.
Good luck! If you’re ready to speak with a defamation attorney, get in touch. We’re here and ready to repair your good name.
After years of paying incredibly high royalty fees, it looks like Internet radio stations, like PANDORA, are in store for a big break in the way of the Internet Radio Fairness Act. If passed, the act will lower the amount of fees that online music streaming services must pay.
The Current Rates For Internet Radio Compared To Satellite
Many Internet laws are ancient in comparison to Web’s growth rate. The current Internet radio royalty regulations are one such example. Passed into law 14 years ago – when AOL discs still arrived daily in the mail – and updated in 2007, the current law requires Internet radio service providers to pay about 2 cents per listener per hour or 25% gross – whichever is higher.
To give you an idea, PANDORA, in the second quarter alone, paid $60.5 million in royalties, which was about 50% of their revenues.
What Does Everybody Else Currently Pay?
The royalty rates set for the various distribution mediums is all over the map – undoubtedly the result of some very effective lobbying. Currently, radio royalty rates are as follows:
- Satellite radio outlets pay 8% of gross
- Cable music services pay 15% of gross
- Terrestrial radio stations don’t pay any royalty performance fees
Startling, right? PANDORA calls it “discrimination against Internet radio.” But while it may seem like a black and white issue, there are those who believe that catering to companies like Pandora is unnecessary and indulgent.
A Musician Association Isn’t Buying What Pandora is Selling
Like any issue, there are two sides to the Internet radio royalty debate. Take, for example, the statement put out by Ted Kalo, executive director of the Music First Coalition: “There’s nothing fair about pampering Pandora, with its $1.8-billion market cap, at the expense of music creators.”
Now, not all artists agree with the Music First stance, but it’s hard to deny that they have a point. After all, paying the musicians, whose work your business 100% relies, only $250 million out of the $1.8 billion you earn doesn’t seem so outrageous. But again, it’s not a black and white issue. Market realities, including advanced communication and distribution models, need to be factored into the calculations.
In case you were wondering, the labels, of course, are firing up their lobbying arms to defeat this bill. (Hey, it’s all about the bottom line for everyone.)
What Will Happen If The Internet Radio Fairness Act Is Passed?
Brass tax: if the Internet Radio Fairness Act gets the stamp of approval, it will lower webcast streaming rates to the same level as cable and satellite providers (different rates for different types of companies).
The bill was sponsored by Representatives Jason Chaffetz (R-UT) and Jared Polis (D-CO). Sen. Ron Wyden, a Democrat from Oregon, is expected to introduce a similar piece of legislation in the Senate. The act will most likely be debated in the first 2013 congressional session.
We’ll have to wait to see how this turns out – and keep an eye on the relevant negotiations and debates to make sure we’re not getting steamrolled – but if you believe John Villasenor, a senior fellow at the Brookings Institution and UCLA professor, passing the Internet Radio Fairness Act may “mean more music choices for consumers, a thriving Internet radio industry and more royalties for musicians.”
Last month, the United States Supreme Court upheld rules that placed limits on media ownership. The statutes forbade one entity from owning both broadcast outlets and newspapers in local markets. While the rules in place limit ownership of print and broadcast products, websites are still considered a piece of the main media company rather than a medium on its own.
Does the Internet Level the Playing Field When It Comes To Media Ownership Regulations?
Some believe that the proliferation of the Internet should result in more lenient media ownership rules. Others, however, think that even though the Internet has somewhat leveled the media playing field, broadcast media companies still enjoy certain benefits.
Let’s take one small example – legal classifieds. While the rules are slightly different from state to state, most have legislation in place that governs what type of publications can run legal advertisements. [Legal advertisements are small 8pt-font ads you may see in the classified section of a local newspaper.] Indiana and other states have strict rules about which printed publications can accept money for legal advertising – something that is required by law. As a result, media companies have been able to raise rates year after year because there is no competition. Yet online websites are usually not eligible to receive money for paid legal advertisements. This is just one example of how traditional media companies still maintain a monopoly in the market. From ordinary citizens to business owners to local governments, no one wins in this situation except for the media company.
Gannett’s Deathstar in Phoenix, AZ
Okay, maybe referring to Gannett as the evil empire in the Star Wars franchise is a bit harsh, but if you know the history of the infamous Gannett Blue Ball, then you also know the comparison isn’t too far-fetched.
In the Phoenix, Arizona market, Gannett owns the Arizona Republic and Channel 12 television station. They also operate a handful of websites related to both media properties. Whether Gannett will be forced to get rid of one or the other in the Phoenix market remains to be seen, but the recent SCOTUS ruling that media ownership laws should be in place may spur the company to action.
While some may argue that the Internet levels the playing field, thereby allowing large companies like Gannett to own multiple outlets in a single market, this is not always the case. From just one thing like legal advertisements, to all the other advantages large corporations like Gannett receive in comparison to smaller media companies, it’s understandable why many are still pushing for stricter media ownership rules.
Back in 2010, Gannett moved to consolidate operations, joining KPNX-TV, the Arizona Republic and other media properties they own into a single entity. Both media properties share a website – AZcentral.com. Still, the combination gives them a lot of control in the local Phoenix market – one of the largest growth areas in the country.
Dan Gillmor, who is big in new media and journalism circles, recently pointed out bias perpetuated by Gannett on their local television station in Phoenix. However, since the local newspaper and major Phoenix websites are owned by the same company, most may not hear this information – or other things Gannett is doing that are not good for the local community.
While the Supreme Court upholding media ownership laws may be seen as draconian by some, there is a need for such laws to maintain a democratic society. After all, how would things run if a single company or corporation controlled every aspect of the local media – even independent blogs may have more difficulties getting the proper information to critique.
Remember, all media laws deserve our attention, not just ones that directly affect the Internet – as they all, eventually, become inextricably linked.