Yelp Sued Over Client Reviews
February 26th, 2010 by Josh King, VP of Business Development and General Counsel
Being on the bleeding edge of a cultural trend isn’t usually the most stress-free place to be. Witness Yelp, the leading site for online reviews of restaurants, bars and other small businesses, which has found itself on the receiving end of a class action lawsuit over user reviews.
Once largely limited to products, reputational ecosystems are now developing around other businesses, services and (as is the case with Avvo) professionals. Think of it as the aggregation and dissemination of what people once merely told one another; the move of “word-of-mouth” into the online world. This adjustment is difficult for some, as online comments will be felt more viscerally by a small business than by a global consumer products manufacturer.
Smart business owners, however, know how to move past this disappointment and effectively deal with, learn from and even capitalize on negative user reviews:
As we’ve pointed out before, the most effective ways to respond to negative online comments are obtaining more positive reviews, posting a professional response, or simply ignoring them. Filing a lawsuit is very rarely the right response, if for no other reason than the Streisand Effect. And filing a lawsuit against the internet service that hosts the reviews? An even uglier path, as the defamation plaintiff gets to experience both the Streisand Effect AND the unceremonious smackdown of their lawsuit colliding with provider immunity under 47 USC 230.
But the plaintiff here (Cats and Dogs Animal Hospital in Long Beach, CA) has taken a novel tack, attempting an end-run around CDA 230 immunity by alleging that Yelp is running an “extortion scheme” by offering to take down negative reviews in exchange for cash.
It’s a creative effort by the plaintiff’s lawyers, Jared Beck (who has two client reviews on Avvo – hey, Jared; wanna pay to take those down? Just kidding!) and Gregory Weston, but here’s a prediction: The suit is going to get booted, and quick.
You see, Yelp sells advertising. One of the benefits of advertising is that an advertiser can choose a “favorite” review to highlight at the top of all user reviews; after that, the reviews are sorted by an algorithm that takes into account the age of the review, how helpful other users found it, etc. It’s a nice balance between the promotion inherent in advertising and consumer transparency (Avvo offers a similar client review-featuring benefit to advertisers and Avvo Pro subscribers).
It’s a safe bet that what really happened here is that the plaintiff confused Yelp’s advertising sales pitch (“become an advertiser and choose the most glowingly positive review to move to the top of the stack”) with extortion, ignoring the fact that Yelp, like Avvo, has a firm policy against deleting most reviews and internal processes that separate advertising sales from the site’s editorial function.
Isn’t this a whole lot likelier than the theory that Yelp is operating an extortion racket? What’s more, if Yelp were extorting businesses, wouldn’t you expect to find few, if any, negative reviews amongst advertisers? Take a look at any random sponsored listing on Yelp (say, for example, Seattle’s Stellar Pizza & Ale). You’ll see lots of reviews, some of them quite negative. The beauty of a healthy reputational ecosystem is that these reviews – positive, negative and in between – paint a composite picture that gives potential customers a wealth of information. They also illustrate that if Yelp is taking payments to delete negative reviews, its advertisers are getting phenomenally poor value.
As Yelp pointed out in its initial response, “running a good business is hard; filing a lawsuit is easy.” Don’t be surprised if the ultimate lesson Dogs and Cats learns here is that it’s even easier – and a lot more effective – to ignore or learn from your bad reviews and focus on delighting your customers. Their word-of-mouth will move online, too.






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