German Supreme Court: Booking Portals Not Liable for Bogus User Reviews

Recently, the Federal Court of Justice (Bundesgerichtshof), the highest court in the system of ordinary jurisdiction in Germany, found that booking portals are not liable for bogus users' reviews tarnishing the reputation of third party businesses they host.
 
The Bundesgerichtshof decided a case in which an anonymous review on a booking portal claimed that an hotel was – inter alia – contaminated by bed bugs. In fact, there were none. Users' reviews have direct influence on online sales and prices in the hotel industry. Therefore, there are incentives for hoteliers to manipulate reviews to give themselves an edge. It is obvious that the author of bogus reviews is directly liable under criminal as well as civil law. However, in this case, since the review was written anonymously, the culprit could not be identified or traced. Therefore, the victim tried to hold the booking portal accountable.
 
The Bundesgerichtshof denied the plaintiff's claim. Although the intermediary profits financially from the existence of users' reviews, the Court ruled that online travel agencies are not liable for the accuracy of user-generated ratings on their web pages. First, anonymous remarks in a review cannot be ascribed to the travel agency, which does not endorse the users' comments. Any informed internet user would reject the idea that booking portals make all the comments their own. Second, there is no direct liability for hosting false comments due to the safeharbor for intermediaries provided by § 10 TMG, which is based on Article 14 of the E-Commerce Directive. The “hosting provider” safeharbor applies because the online travel agency is a “neutral” platform that does not interfere with the user’s communication. Therefore, the Court noted, it is not obliged to fulfill “any unreasonable duties to review,” which could “challenge the entire business model” of the platform operator. If, however, the booking portal is informed of comments allegedly in violation of unfair competition law, it should promptly remove them to avoid liability.
 
The German Supreme Court embraced similar principles as those adopted by US federal courts. In the United States, plaintiffs have attempted, so far unsuccessfully, a variety of legal theories to hold platforms, like Yelp for example, responsible for bogus reviews. However, competing interests might be hard to balance in these cases. On the one hand, the court ruling strengthens freedom of expression online by protecting intermediaries. On the other hand, lack of legal tools to tackle effectively widespread bogus reviews will inevitably lead to losing trust in consumer ratings. Therefore, it remains to be seen whether the German courts will hold onto this guiding principle or take also other competing interests into consideration.
 

Comments

I am unclear about your comment that the "German Supreme Court embraced similar principles as those adopted by US federal courts" because the E-Commerce Directive requires an expeditious take-down for the neutral portal to avoid liability whereas section 230 in the US would shield Yelp completely [regardless of take-down], wouldn't it? If that difference is correct, it seems like very different principles - without addressing which framework is better.

Yes, you are certainly right. The generalization referred to a broader level of abstraction. Both legal systems rejected intermediary liability for bogus reviews, although with differences due to the Section 230/eCommerce Directive different approach. 

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