To Yelp Or Not To Yelp? Lawsuit Puts The Chill On Bad Reviews

NPR | Dec. 9, 2012 11:36 a.m.

Contributed By:

Steve Mullis

The next time you are about to post a scathing review of a business on a site like Yelp or Angie’s List, you might want to think twice.

This week, a housing contractor named Christopher Dietz sued a former customer for $750,000 in defamation charges for what she wrote in a review on Yelp.

Jane Perez wrote that there was damage to her home and that jewelry was missing after she’d had work done from Dietz’s company, Dietz Development LLC.

On Thursday, a judge took the unusual step of ordering her to take down parts of those reviews, and the case is still ongoing.

While this isn’t the first lawsuit of this type, Santa Clara University law professor Eric Goldman tells NPR’s Rachel Martin that these cases are so far uncommon, because online reviews are still such a new area.

“We’re still developing the rules about how to deal with consumer reviews,” Goldman says. He also says often the economics of litigation don’t support lawsuits for a single, negative review.

Goldman says the reality is that it is extremely unlikely that a single review costs a business anything.

“My perspective is that any individual review is not credible, but the aggregate affect of the reviews … tend to paint a pretty accurate picture,” he says.

A Harvard study in 2011 showed that a one-star increase on Yelp leads to a 5 to 9 percent increase in revenue. That potential revenue bump gives businesses all the more reason to fiercely protect their online reputation.

The lawsuit itself, Goldman says, is a reminder that even though we have the freedom to voice our opinions on the Internet, we also own those words and can be held responsible for them.

“Most people don’t realize that they’re betting their house … every time they put their opinions out into the public discourse,” he says. “When people realize that it becomes incredibly inhibiting.”

That appears to be the danger here: why risk posting a negative review if a business can sue you for it?

It’s important to note, however, that Perez was sued for specific portions of her review that Dietz considered defaming, libelous and untrue. In other words, a negative review that’s true is, in theory, safe.

So, the next time you fire up your Yelp account after a dinner out, just make sure it really was the worst maple-glazed salmon you’d ever had and that the fly in your drink was real.

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