As consumers, we expect on online review sites to convey impartial, word-of-mouth opinions and ratings, whether we’re looking for a new restaurant to try out, a boutique bed and breakfast for our next vacation, or an electrician for a project on our house.
As business owners, we expect online review sites to offer a level playing field where we can rise to the top based on the merit of our products and services and the happiness of our customers, not our willingness to pay.
You can imagine how incensed both parties might be if they were to find out that the review site they rely on is manipulating ratings based on behind-the-scenes deals. They might even sue!
Well, a group of business owners did just that. Janell Moore, Michelle Zygelman, and Gary Glick recently filed suit as a class action against the major home services review site, Angie’s List, alleging that the company “does not adequately disclose that it accepts advertising payments from service providers or that the payments may affect service providers’ letter-grade ratings, reviews, and placement in search-result rankings.”
The suit has now been settled with Angie’s List denying the claims and admitting no wrongdoing, but ponying up $1.4M plus attorney’s fees to settle the suit. So if you have had a paid account on Angie’s List in the past and are a potential member of the settlement class, you may have received a surprising email about it.
Below, you’ll find the contents of the email:
Current or former members of Angie’s List, Inc. may benefit from a proposed Class Action Settlement.
A proposed settlement has been reached with Angie’s List, Inc. (“Angie’s List”) in connection with three putative class action lawsuits focusing on Angie’s List’s acceptance of advertising payments from service providers, and whether those payments affect service providers’ letter-grade ratings, reviews, and place in search-result rankings. Angie’s List denies Plaintiffs’ claims, including denying that advertising revenue can affect ratings or the content of reviews in any way and asserting that it discloses that it receives revenue from certain service providers who are rated highly by members and further discloses that such revenue can affect the order of search-result rankings under certain settings. The Court has not decided who is right. In order to avoid the expense and risks of continuing the lawsuit, the Parties agreed to a proposed class settlement.
Who’s Included? You received this email because Angie’s List’s records show that you may be a member of the Settlement Class. You are a member of the Settlement Class if you were a paying member of Angie’s List at any time between March 11, 2009, and July 12, 2016.
What Are the Settlement Terms? Settlement Class Members who submit a timely and valid Claim Form may choose: (1) an estimated cash payment of $5 and/or $10 (subject to a possible pro rata adjustment upwards or downwards) depending on the timing of their membership and the number of valid Claims submitted; or (2) one free month of membership to Angie’s List for each full year he or she paid for membership during the relevant periods (up to a maximum limit). Angie’s List also has agreed to expand upon the disclosures about service provider advertising made in its Frequently Asked Questions on its website and in its Membership Agreement.
How Can I Get a Payment or Membership Benefit? You can quickly file a Claim online at www.MoorevALsettlement.com or by clicking here. You can also download and print the Claim Form from the website. You must file your Claim Form so that it is received (if submitted electronically) or postmarked (if submitted by mail) by November 15, 2016.
Your Other Options. If you do not want to be legally bound by the settlement, you must exclude yourself by October 24, 2016. If you do not exclude yourself, you will release any claims you may have against Angie’s List, as more fully described in the Settlement Agreement, available at the Settlement Website. You may also object to the settlement by October 24, 2016. The Long Form Notice available on the website listed below explains how to exclude yourself or to object. The Court will hold a Hearing on December 5, 2016 to consider whether to approve the settlement and a request for payment of attorneys’ fees and expenses of no more than $937,500 and for service awards of $12,500 to be shared by the three class representatives. You may appear at the hearing, either yourself or through an attorney hired by you, but you don’t have to. For more information, call 1-888-293-9919, or visit the website listed below.
For more information about the settlement, please visit www.MoorevALsettlement.com, which includes a full copy of the Settlement Agreement and a more detailed description of the settlement and other important information. Please check the Settlement Website for updates and further information.
SOURCE: United States District Court for the Eastern District of Pennsylvania
What’s This Mean For Business Owners?
While the FTC has been in the news recently for cracking down on the required transparency of brands when working with sponsored influencers, the more attention capturing aspect of the case is the allegation that Angie’s List manipulates the review ratings of their paying advertising customers.
If Angie’s List is in fact manipulating review ratings, that’s a major red flag for consumers and business owners alike. While not being widely reported at this time, it will be interesting to see if this story picks up steam. Whether or not this class action suit has merit, it’s a PR hit that could significantly damage confidence in the online review site. Only time will tell how well Angie’s List weathers the storm and remains a valuable channel for small businesses and their customers.