Yelp seeks DC clout after rapid rise

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The online review site Yelp is seeking clout in Washington to match its growing influence in Silicon Valley.

The company made a splash by hiring a former staffer to House Oversight Committee Chairman Darrell Issa (R-Calif.) as its first ever in-house lobbyist and followed it up by forming a political action committee to funnel donations to candidates.

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Tech industry observers say the moves reflect Yelp’s maturation into a major company.

“I think it’s a sign that Yelp has reached a point in its growth where it needs to start paying attention to its unique policy issues,” said Eric Goldman, a law professor at Santa Clara University and head of the school’s High Tech Law Institute.

“Paying attention to the inside-the-Beltway activities is pretty low on the priority list of most Silicon Valley companies. So it’s a sign that Yelp got to the point where paying attention to D.C. had emerged high enough on its priority list,” he said.

Yelp has more than 100 million monthly users and is worth more than $4 billion but so far has been less politically active than heavyweights like Facebook or Google, which have fielded lobbying teams in Washington for years.  

Unlike other sites that specialize in user-generated content, Yelp’s business depends entirely on allowing its users to write reviews, especially negative ones, of businesses. That means the company needs to protect its users from businesses that want to protect their reputation online.

Facebook, for instance, also publishes reviews of other businesses, “but that gets washed away by all the other content on its site,” Goldman said. “Whereas for Yelp, if its consumers lost their ability to post negative reviews, Yelp wouldn’t function properly.”

One of the top priorities for Yelp’s new lobbyist, Laurent Crenshaw, is defending a law that protects some websites from liability, when they publish users’ posts.

Section 230 of the Communications Decency Act gives Yelp the ability to host negative reviews without coming under fire for libel claims, providing a safeguard against costly court battles.

It “allows [user-generated content] sites like Yelp to exist and provide our service to consumers and small businesses without the threat of cost-prohibitive litigation over user content,” Yelp spokeswoman Rachel Walker told The Hill in an email.

The website is also lobbying for the creation of a federal law restricting strategic lawsuits against public participation (SLAPP). An anti-SLAPP law would limit burdensome and harassing lawsuits, supporters say.

“SLAPP filers don’t go to court to seek justice, but instead, to silence, intimidate, and harass those who disagree with them. SLAPPs are effective because even a meritless lawsuit can take years and many thousands of dollars to defend,” Evan Mascagni, legislative assistant with the California-based Public Participation Project, wrote in an email.

“Federal anti-SLAPP legislation would allow providers of interactive computer services like Yelp to get SLAPPs dismissed quickly and relatively easily, and get an order requiring the plaintiff to pay their attorney’s fees.”

So far, 28 states and the District of Columbia have enacted anti-SLAPP legislation on their own, but the Public Participation Project is working to get a national bill introduced in this session of Congress, Mascagni said.

Yelp is also pressing for new laws to limit “patent trolls,” which tech firms say buy up patent rights and take legal action against companies that use similar technology.

Supporters of reform argue that these companies often never produce a product while threatening lengthy and expensive lawsuits in order to extract licensing fees.

“Yelp has been a victim of patent trolls and we strongly support reform in this area and seek to add our voice, perspective and experience to the effort,” Walker wrote.

But not everyone agrees that a patent trolls are a problem.

Officials at Intellectual Ventures, one of the top patent owners in the U.S., worry that legislative efforts trying to limit patent trolls are misplaced and could end up hurting small inventors.

Anecdotal evidence, not numbers, are driving the conversation, said chief policy counsel Russ Merbeth.

“There’s very little data available on the extent of this problem, and to bring out the cannons of legislation to address something that nobody can actually put a real hard number on seems kind of premature,” he said.

So far, the tech industry’s arguments have been winning out.

In December, the House overwhelmingly passed Judiciary Committee Chairman Bob Goodlatte’s (R-Va.) Innovation Act, which aims to rein in patent trolls. The bill would require patent lawsuits to be more specific about why a company is being sued and requires rights owners to be more transparent.

In the upper chamber, Sens. Patrick Leahy (D-Vt.) and Mike Lee (R-Utah) introduced a bill in November that would also seek to make patent ownership more transparent and limit trolling.

Yelp is also diving into the D.C. money game with its PAC for political donations. The company filed papers with the Federal Election Commission in late December to get the operation up and running.

Walker, the company spokeswoman, declined to comment on the candidates that the PAC would support, but chief executive Jeremy Stoppelman has been a strong supporter of Democrats in recent years.

Ahead of the 2012 election, Stoppelman donated more than $71,000 to President Obama’s reelection campaign, the Democratic National Committee and state Democratic parties, according to data compiled by the Center for Responsive Politics.

It’s possible that Yelp will take a cue from other Silicon Valley companies that have made a point of contributing to Republicans despite the liberal leanings of top executives.

But regardless of how the PAC operates, Yelp’s influence on Capitol Hill is nearly certain to increase.

“Bottom line: Washington is dealing with important issues that can affect our company and our users, and the time is right for us to have a seat at the table,” Walker said.

 

 

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