Japan restaurant review site wins appeal over rating algorithm change

TOKYO (Kyodo) — The Tokyo High Court on Friday overturned a lower court ruling for the operator of Tabelog, a popular restaurant review website, to pay damages to a Korean barbeque chain over changes to its rating algorithm, deeming that it did not violate the antimonopoly law.

Presiding Judge Toshikazu Kino ruled that the site operator Kakaku.com Inc.’s algorithm change was reasonable as it was implemented to correct a misalignment with consumer perceptions, and its impact to competitiveness in the restaurant market was limited despite it resulting in lower ratings.

Tokyo-based Hanryumura had sought about 639.05 million yen ($4.3 million) in damages claiming that lowered scores for 21 outlets of its Korean barbecue chain KollaBo, when the site’s algorithm was changed in May 2019, resulted in customers falling by more than 5,000 per month.

The Tokyo District Court ordered Kakaku.com in June 2022 to pay 38.4 million yen in damages to the chain, ruling that the algorithm, which uniformly lowered scores of chain restaurants, violated the antimonopoly law and was considered an “abuse of a dominant bargaining position.”

While Friday’s court ruling acknowledged that Tabelog, which boasts about 90 million monthly users, had a trading advantage over the chain, it deemed that the change did not constitute an abuse of a dominant bargaining position under law.

Hanryumura President Im Hwa Bin, 52, called the ruling “regrettable” at a press conference in Tokyo following the ruling, saying, “We will continue to fight for consumers and businesses,” while indicating an intention to appeal.

Kakaku.com had argued that the change in the algorithm was made in the interest of its users, and score fluctuations should be naturally assumed.

“Our claims have been recognized as legitimate. We will continue to strive for the provision of fair and neutral services in the future,” the company said.

Tabelog is widely used in Japan when people look for a place to eat, with its scores calculated based on reviews of visitors to the establishments, often directly influencing the number of customers.