Operator of restaurant review site Tabelog ordered to pay damages

Jiji Press

17:29 JST, June 17, 2022

TOKYO (Jiji Press) — The Tokyo District Court on Thursday ordered the operator of Tabelog, a customer-sourced restaurant review website, to pay damages to a Tokyo-based Korean barbecue chain claiming to have lost customers due to its rating system, which it said is unfair.

Presiding Judge Fumitaka Hayashi said that Tabelog’s rating system has “inflicted unfair disadvantages, constituting the abuse of its dominant bargaining position,” which is banned by the antimonopoly law. The court ordered Kakaku.com Inc. to pay ¥38.4 million to the barbecue chain, Hanryumura, which had sought some ¥600 million in damages from the Tabelog operator.

In its lawsuit, the barbecue chain claimed that Tabelog changed its rating algorithm in May 2019, lowering ratings uniformly for 21 Hanryumura outlets as they are chain stores. Hanryumura said that the impact on its business from Tabelog’s action was huge, and that it constitutes discriminatory treatment in business conditions and the abuse of dominant bargaining position, which are prohibited by the antimonopoly law.

In Tabelog’s rating system, paid member restaurants show up preferentially in results of user searches.

Its website listed about 820,000 stores as of April with some 88 million users per month as of March.

The district court said that restaurants have no choice but to accept even disadvantageous requests as they would face a major problem in their operations if it becomes difficult for them to maintain their status in the rating system.

Noting that Tabelog has a dominant bargaining position, the court said that the change in the rating rule constitutes a transaction that is disadvantageous to restaurant chains.

The court said the 21 outlets suffered a loss of ¥1.6 million per month, ordering Kakaku.com to pay damages equivalent to two years of losses.

The district court rejected a demand by Hanryumura for an injunction against the rating rule. The rating is not the only indicator for consumers in selecting restaurants, the court said.

Hanryumura plans to appeal the ruling over its dissatisfaction about the amount of compensation.