Yelp alerts for racist behavior likely to pass legal muster, observers say

Attorneys say Yelp Inc.'s decision to publish alerts when someone associated with a business is accused of racist behavior pushes the boundaries of its legal protections but will not expose the company to liability.

"I don't think it crosses the line," said Peter Obstler, a partner with Browne George Ross LLP who has sued Alphabet Inc-owned YouTube for using algorithms that discriminate against both Black users and conservatives.

The San Francisco-based review site announced Thursday it would post alerts on pages of business where customers have reported incidents of racism, according to Noorie Malik, vice president of business operations.

The first category would feature a general alert if an employee at the business was accused of racist behavior.

A Yelp spokesperson said moderators would investigate and temporarily disable content while they place an alert on the business's page to warn users some reviews may not be based on firsthand experiences.

If there was "resounding" evidence of racism that was the subject of a news report, Yelp would post a prominent "Business Accused of Racist Behavior" alert in bold print on the page along with a link to the report in a "credible media outlet."

"Yelp's top priority is to ensure the trust and safety of our users and provide them with reliable content to inform their spending decisions, including decisions about whether they'll be welcome and safe at a particular business," Malik wrote.

Attorneys debated Friday whether Yelp's action would endanger its protections under Section 230 of the Communications Decency Act, which allows online companies to avoid liabilities for speech on sites such as Facebook Inc. and Twitter Inc.

The alert could be criticized as "editorializing," and some conservatives have suggested amending Section 230 to eliminate a company's eligibility for legal protection if it does so, according to Santa Clara University School of Law professor Eric Goldman.

But he and other legal experts said the alerts -- even one as prominent as the one planned by Yelp -- would not do away with the company's Section 230 protections.

"I don't think Yelp views that as a serious legal threat," Goldman said. But, he added, the new policy could be manipulated by a company's competitors or activists to target businesses with dubious claims.

"Even if Yelp doesn't view the legal threat as serious, they are absolutely going to hear from businesses that are labeled," Goldman said.

He and Obstler both said Yelp could be sued for defamation, but both said that would be a difficult case to prove.

Attorneys compared Yelp's potential liability to that of TripAdvisor, which published a 2011 list of America's dirtiest hotels.

A Tennessee hotel owner sued the company, but the 6th U.S. Circuit Court of Appeals ruled in 2013 the article was not defamatory. Seaton v. TripAdvisor LLC, 12-6122 (6th Cir., filed Aug. 28, 2013).

Still, Brian M. Willen, a partner with Wilson Sonsini Goodrich & Rosati PC, said he thought a future lawsuit would be "a close call."

"The more it looks like Yelp's speech, where they're making broad, declaratory remarks, the more likely it is a court would say it's your speech." Willen said. "It's on the outer edge of what Section 230 would allow."

The most likely claim against Yelp would be defamation, a difficult allegation to prove, attorneys said.

Obstler, however, said any allegations of racist behavior would be made by users and not Yelp.

"I don't think they have a [Section] 230(c) problem," he said. "They're reporting this business is being accused."

"If the [linked] article turns out to be a hit job, the claim is against the news outlet," Obstler added. "You cannot sue Yelp. That's classic 230."