A Japanese court on Thursday ordered the operator of Tabelog, a popular restaurant review website, to pay about 38.4 million yen ($286,000) in damages to a Korean barbeque chain, judging that its rating algorithm is unfairly designed for chain outlets.
The Tokyo District Court found that the site operator Kakaku.com Inc. violated the antimonopoly law, saying its algorithm, which uniformly lowered scores of chain restaurants, is considered an "abuse of dominant bargaining position."
But the court rejected an injunction sought by the restaurant chain to stop the operator from using the algorithm, saying its negative impact on sales may not continue as consumers would choose restaurants by considering the change of the site's algorithm.
The ruling came as a number of restaurants have voiced concerns over opaque rating methods on one of the most influential restaurant review sites in the country.
In the ruling, the court said that Tabelog, which boasted about 87.63 million monthly users as of March, had a trading advantage over the chain and it would have to accept detrimental treatment if it ceases to be a paid member of the website.
Speaking at a press conference in Tokyo, Katsumasa Minagawa, a lawyer representing the Toyo-based Hanryumura, welcomed the ruling, saying, "The court accepted almost all our claims. It's extremely meaningful."
The chain said it will appeal the ruling, however, as its request for the injunction was rejected.
In a statement posed on its website, Kakaku.com said it appealed the ruling as it is "unjust."
In the lawsuit, Hanryumura had claimed the scores for about 20 outlets of its Korean barbecue chain KollaBo fell about 0.2 point on average on the rating scale of 1.0 to 5.0 points when the site's algorithm was changed in May 2019, with the largest fall reaching 0.45 point.
Seeking about 639.05 million yen in damages, the chain argued that the number of restaurant customers fell by more than 5,000 per month after the change.
Kakaku.com said the change in the algorithm was made in the interest of its users, and score fluctuations should be naturally assumed.
The review calculation methods by the algorithm, which the operator has kept secret for fear of score manipulations, were exclusively disclosed to concerned parties in the suit.
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.
The online service, opened in 2005, features more than 820,000 restaurants and bars, according to the Tokyo-headquartered operator.
The ruling is believed to be the first judicial judgment over the validity of Tabelog's algorithm.
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