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Brand Killers: The Dreaded Yelp Review & 'The Streisand Effect'
By: Maryann Fabian
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Yelp is suing a law firm in San Diego for allegedly posting fake reviews to boost its rating. The law firm says Yelp is just retaliating because it won back the $2,700 it spent in advertising on Yelp in a small claims court case. The firm’s owner calls Yelp “an Internet bully” who mistreats companies that don’t advertise with them.

We’ve heard variations of this story before. Back in 2009, Yelp was accused of extortion. A San Francisco restaurateur  claimed Yelp promised to hide negative reviews in exchange for advertising. He was told, “We can move them. Well, for $299 a month.”

A 2011 Harvard study rated the effect of a positive Yelp review on Seattle restaurants. Going up by one star in Yelp’s five-star rating system can mean 5–9 percent revenue growth. Consumer Reports says about 66 percent of the reviews on Yelp were four or five stars in the first quarter of this year. And Yelp told them, it “uses software to filter out bogus reviews and keep legitimate ones but it hasn’t been objectively tested.” Around 70 percent of the site's 36 million reviews are not filtered, though.

A poor review can be devastating, and Yelp got an earful from small business owners during its recent series of town hall meetings. The L.A. Times attended one where a restaurant owner said she “cried for three days” after someone posted on Yelp that her restaurant was “filled with Nazis.” Another complained, “I have one-star reviews for my diner from people that have never walked into the place.” A vintage clothing store owner said when she declined to buy an ad, “The lower reviews go to the top and the higher reviews go to the bottom.”

Then there’s the story of the Sarasota man who owns a computer graphics company. He filed a defamation lawsuit against the disgruntled customer who gave him a one-star review and called him a “scam liar and complete weirdo” because he said it led to a 70 percent drop in business.

As you can imagine, Internet defamation lawsuits are on the rise. But there’s a loophole in the Communications Decency Act that protects sites like Yelp. Even if a person admits to posting fake reviews, the hosting site has the right to decide whether to take it down or not. Until this is changed, Yelp will always hold an advantage over a small business.

Ironically, Yelp advises about legal threats in the FAQ section on its site:

Far from being cowed, recipients will sometimes go public with them as a warning to others not to patronize your business. Second, beware of lawyers who are quick to file lawsuits without telling their clients that it can cost them dearly. Last, take a step back: if you find yourself insisting that a review is obviously untrue, there's every reason to think that your customers will draw the same conclusion as you.

Yelp may want to consider taking its own advice before it’s too late, or as the L.A. Times put it, “the veil of untrustworthiness [continues] to cloud perceptions.”

Finally, something else to keep in mind...

In 2003, Barbara Streisand sued a photographer for publishing a picture of her home on the Internet, but all of the publicity surrounding the case had ill-intended consequences. Before her lawsuit, the photo had only been downloaded six times. Public knowledge about the case caused downloads to jump to 420,000 in just the following month. It even caused a new phrase to be coined — The Streisand Effect, for when an attempt to hide or remove information backfires. 

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About the Author
Maryann Fabian is a copywriter who has crafted the voice of some of this country's best brands.
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