Thursday, August 18, 2011

TripAdvisor Cover Bases?

An article from Cornell showcaisng the fact they have developed software that has a 90% success rate in identifying fake travel reviews themn went onto highlight a statement made to the American Securities and Exchange Commission that exposes Expedia worries over the "airing of grievances" on review sites and the fear of litigation in the future.

Expedia to take the step of warning potential TripAdvisor investors of possible liabilities in the form of legal claims stemming from such user reviews. In a 184-page document filed with the Securities and Exchange Commission on July 27, Expedia said TripAdvisor could be subject to legal expenses related to claims ranging from defamation and libel to negligence.

“These claims, whether brought in the United States or abroad, could divert management time and attention away from TripAdvisor’s business and result in significant costs to investigate and defend,” Expedia stated in the document. “If TripAdvisor becomes subject to these or similar claims and is not successful in its defense, TripAdvisor may be forced to pay substantial damages.”

Last September, a group representing owners of about 120 U.K. hotels said it would file a class action against TripAdvisor, alleging that the site hurts sales at many smaller hotels and other businesses in the hospitality industry by publishing libelous and potentially false reviews without verifying them.

U.K.-based KwikChex, which had been soliciting companies to pay 35 pounds ($50) to join a group legal action, said it presented its findings to the U.S. Federal Trade Commission in March.

Forrester Research principal analyst Henry Harteveldt said Expedia’s warning in SEC filings didn’t surprise him.

“However, I wouldn’t expect it’s something they’d want to voluntarily disclose,” Harteveldt said. “I suspect that it was deemed important enough by the firms’ lawyers and investment bankers as a risk to the business that it needed to be disclosed.”

Read Full Article on Travel Weekly website

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