TOKYO -- A website that publishes crowd-sourced restaurant reviews has taken the rare move of disclosing details of its rating algorithm after being sued by a Korean barbecue chain that complained its score was unfairly lowered.

       The review website, Tabelog, is operated by Tokyo-based Kakaku.com Inc. The operator had initially refused to disclose its algorithm, saying it wanted to prevent unauthorized action, but it appears to have been out-negotiated by the restaurant chain, which argued that its review methods were not transparent.

       The scores that restaurants receive on crowd-sourced review sites have a direct impact on their sales, and the Japan Fair Trade Commission is seeking more transparency in the operation of ratings. If similar moves go forward, it is possible that review sites will become more transparent.

       The suit was filed by Hanryumura Co. Ltd. based in Tokyo's Minato Ward. The company operates the Korean barbecue chain KollaBo, whose outlets are located mainly in the Tokyo metropolitan region. According to the complaint and other sources, in May 2019, the ratings of 19 out of all 21 KollaBo outlets dropped from an average of 3.24 points to an average of 3.09 points (out of a maximum of five points). As a result, the company said, the number of customers dropped by at least 5,000 people per month. The company brought a lawsuit to the Tokyo District Court in May 2020 seeking around 640 million yen (approx. $5.9 million) in damages.

       The Tabelog website explains that its algorithm uses the score that a user gives a restaurant and the influence and other qualities that the user has to come up with the establishment's final score. But the plaintiff argued that Tabelog unfairly tampered with the algorithm so that the chain's outlets' scores would go down across the board, and that such action amounted to the abuse of one's superior position, prohibited under the Act on Prohibition of Private Monopolization and Maintenance of Fair Trade.

       In the trial, Tabelog admitted that it had changed its algorithm, but did not disclose any specifics. It also argued that the act of giving scores to restaurants was not an act of "trade" subject to the Anti-Monopoly Act.

       In July 2021, the district court sought an opinion from the Fair Trade Commission on the Anti-Monopoly Act. The commission expressed a view that aligned with the plaintiff's, saying that dining establishments become paying members of Tabelog with the hope that they will come to be known more widely through word of mouth, and that "the act of giving scores is tied to trade."

       In response, Tabelog disclosed an overview of its algorithm to the plaintiff in December. But Kakaku.com petitioned the district court for restrictions on who could see the overview, saying that the algorithm was a trade secret, and its request was accepted. Therefore, neither the plaintiff nor the defendant have revealed the specifics of the algorithm to the media.

       "Dining review sites have this strong sense of not wanting others to know their algorithms in order to maintain fairness, but for restaurants, this appears as non-transparent score manipulation," commented Daisuke Korenaga, a professor at Tokyo Metropolitan University who is well versed in Anti-Monopoly Law. "It is not enough simply to say, 'We are being fair,' and the disclosure of algorithms is very important in verifying fairness and neutrality. It is probably necessary to secure trust by making the operation (of such sites) transparent."

       Scores on review sites have the ability to impact how many customers an establishment can attract. But the way that scores are calculated is cloaked in a veil, and many are calling for more transparency.

       Im Hwa-bin, the president of Hanryumura, noticed in May 2019 that the KollaBo outlets' scores had gone down at the same time. At least 30% of the chain's sales come via Tabelog so it was a serious blow to the company. Im contacted Tabelog to ask why the scores had gone down or how the algorithm works, but did not get a convincing explanation.

       "A 0.1-point change can greatly influence an establishment," Im said. "As the largest dining review site, Tabelog should be held accountable."

       Meanwhile, Tabelog told the Mainichi Shimbun, "We will refrain from commenting as we are in the midst of a trial."

       The Fair Trade Commission, which is preparing rules for IT companies referred to as "platformers," conducted a fact-finding survey of 17 restaurant review sites, including Tabelog. According to the results released in 2020, some 83% of customers responded that they take the scores an establishment has received into account when choosing where to go. At the same time, however, around 32% of member establishments said that they were unhappy with or doubtful of the scoring system. "When we stopped paying dues and became a non-fee paying member, our score dropped significantly. When we started paying dues again, our score went back up," one establishment answered.

       In its survey results, the Fair Trade Commission pointed out that the arbitrary setting and operation of algorithms by dining review websites has the potential to constitute abuse of a superior position. In regards to the important factors that determine a business score, the commission also said, "It is desirable (for review sites) to clearly inform dining establishments and users about them, and secure transparency."

       (Japanese original by Kazuhiro Toyama, Tokyo City News Department)

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