Yelp reviews brew fight over free speech vs. fairness

Many businesses say the anonymity of online comments is unfair, and a Virginia businessman is suing to unmask users.

By Money Staff Apr 3, 2014 1:36PM

This post comes from Angus Loten at partner site The Wall Street Journal.


The Wall Street Journal on MSN MoneyA closely watched Internet free-speech case is headed to the Virginia Supreme Court this month, with many businesses that live and die by online reviews rooting for the owner of a small, suburban carpet cleaner.


In early 2012, Joe Hadeed, owner of Hadeed Carpet Cleaning Inc., arrived at his office atop a 70,000-square-foot warehouse in Springfield, Va., to discover a critique posted on Yelp.  "Lots of hype, a mediocre cleaning and a hassle at the end. Don't go with Joe!" wrote a "Mike M." A few days later, another review, by "M.P." popped up: "I will never use them again and advise others to proceed with caution!" it said.


Over the next several weeks, a string of similarly harsh reviews replaced more-favorable comments "as if someone had flipped a switch," said the 47-year-old Mr. Hadeed, in an interview last month at his offices, where trucks drop off carpets to be washed, rinsed and dried.


Following the rash of negative Yelp reviews, business sank 30 percent in 2012, Mr. Hadeed says. Last year, Hadeed cleaned just 20,000 carpets, down from 29,000 in 2011. Revenue fell to $9.5 million from $12 million in 2011. Mr. Hadeed said the business has let 80 workers go and sold six trucks, reducing its fleet to 54.


The Federal Trade Commission has received more than 2,046 complaints filed about Yelp from 2008 through March 4, according to data reviewed by The Wall Street Journal, following a Freedom of Information Act request. Yelp shares fell 5.7 percent in Wednesday trading, after the tally was posted on FTC.gov.


Most of the complaints are from small businesses that claim to have received unfair or fraudulent reviews, often after turning down a pitch to advertise on the site, according to a separate spreadsheet of complaints to the FTC about Yelp, reviewed exclusively by the Journal. For instance, a business owner in Montclair, N.J., whose name was redacted said: "I was contacted by a Yelp salesperson to advertise, which I declined, and since have only had negative posts on their site."


Joe Hadeed of Hadeed Carpet Cleaning
Credit: Courtesy of Hadeed Cleaning Services via Facebook, www.facebook.com/hadeedcarpet
Yelp denies any connection between reviews and advertising on the site. "Our recommendation software doesn't punish people who don't advertise," Yelp spokeswoman Kristen Whisenand said, adding, "There has never been any amount of money you can pay Yelp to manipulate reviews."


For his part, Mr. Hadeed says he is certain that at least seven of the bad reviews about his business are fraudulent—possibly posted by competitors—because he was unable to match them to actual customers, based on time, location and sales data. One review, for instance, came from Haddonfield, N.J., where the company doesn't do business.


In July 2012, Hadeed sued the seven reviewers for defamation, and demanded that Yelp turn over their true identities. So far, both the Alexandria Circuit Court and the Virginia Court of Appeals have sided with Mr. Hadeed, holding Yelp in contempt for not turning over the names. Yelp in January appealed to the state Supreme Court, arguing that the reviews are protected under the First Amendment and that Mr. Hadeed offered scant evidence that they were fakes.


This month the Supreme Court could issue an order granting or denying Yelp's appeal, or schedule a hearing in Richmond, which could take place in the next 90-120 days.


"They say they have a right to put this information out there. But where's my right to defend my business?" said Mr. Hadeed, in the interview.


Consumer-review websites—whether Yelp, Angie's List, Google + Local, Yahoo Local Listings, or Amazon.com—are shielded from liability for defamation claims stemming from user comments under the Communications Decency Act of 1996.


In the eyes of business owners, this isn't fair.


Yelp said it receives roughly six subpoenas monthly, some of which seek the names of anonymous users. Though Yelp declined to say whether the subpoenas had increased or decreased, it said many requests for information arise from private litigation brought by business owners.


Businesses have had some success in courts going after individuals who criticize them online, though rarely, and companies like Yelp and Google Inc. remain unscathed, according to Eric Goldman, a professor at Santa Clara University School of Law who is also a director at the Public Participation Project, a Berkeley, Calif., nonprofit that promotes legislation to protect free-speech online.


Courtesy The Wall Street Journal"We do see consumers who lose lawsuits over defamatory reviews, but rarely," he said. Many people take for granted that the Internet is full of hyperbole, and there are disincentives for businesses to sue consumers, including the fact that a lawsuit can draw attention to criticisms, he added.


The Public Participation Project said it gets a call every week from reviewers who say they are being sued by a business or threatened with a lawsuit.


Among small businesses, much of the anger is directed at Yelp, which allows its users to sign up free and post reviews under a made-up "screen name." San Francisco-based Yelp attracts 120 million visitors a month with more than 50 million customer-generated reviews on everything from local stores and restaurants to chiropractors and the parking authority. It says the vast majority of those reviewers use their real names, though a handful have reason to remain anonymous, such as medical patients, or workers at a chain or other large employer.


"There's a huge paradigm shift in the way that businesses get discovered and how they're marketed, and, as a business owner, you have to deal with that," says Vince Sollitto, Yelp's vice president of government relations.


"I feel helpless," says 63-year-old Judy Scales, who co-owns Alloy Wheel Repair Specialists of Northern Virginia with her husband. In May, a customer alerted her to a Yelp review that called her business a "shady hack-job repair service." She says the unnamed writer claimed the work was done on a wheel as it remained on the car, a practice the nine-year-old business doesn't do.


When she asked the site to remove the comments, she said a Yelp official told her the post offered a legitimate opinion and wouldn't be changed.


"Your reputation is everything," said Ms. Scales, who blames the review for a slight dip in sales last year, to about $700,000.


In November, Yelp hired lobbyist Laurent Crenshaw, who previously worked for California Republican Darrell Issa, to push for a federal "Anti-Slapp" law, according to federal lobbying registration records. Slapp stands for Strategic Lawsuit Against Public Participation, and anti-SLAPP laws aim to prevent businesses or other powerful groups from filing baseless lawsuits against their critics.


To date, nearly 30 states, including California, Florida and Texas, have enacted or considered anti-SLAPP bills, which typically seek speedy resolutions of the cases and charge all legal fees to the losing party. "Customers have the right to their opinions without being harassed and intimidated," Mr. Sollitto adds.


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50Comments
Apr 3, 2014 4:47PM
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I am a small businessman who alerted by other businesses about the Yelp tactics years ago.  It is widely known as the "YELP SCAM".  The other business owners told me how it works.  The Yelp sales rep calls twice.  If you refuse both times then very soon your reviews become much more negative.  Good ones disappear.  Negative ones are not only kept, but moved to the top.  If you look at Yelp reviews, you will notice that they are not in chronological order.  Very old negatives are often at the top for non-Yelp customers.   For a few years, I was lucky and Yelp did not call.  When they did, the exact same pattern happened as happened to my other small business friends.  The large Seattle TV station KING-5 did a report on a similar event with a moderate sized family restaurant that always had great reviews.  Shortly after he refused to pay the $3600 a year to advertise with Yelp, his rating suddenly dropped and a sorts of negative reviews appeared.   We all feels like a computer virus came in and just emptied our bank account.  Many people across the country have complained or sued Yelp, but Yelp has a lot of money for lawyers and lobbying.  I have been a small business conferences with national speakers who warn about the Yelp scam.  They are the only social media review company with this very negative reputation.  Yelp is probably the most hated national company in country by small business people.  They are seen as unscrupulous scammers who will gladly destroy small family businesses to make a buck.  If they were rated themselves.  They would be given zero stars by tens of thousands of small business owners. 
Apr 3, 2014 4:57PM
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I think it would be helpful if, on websites where people give critiques on work performed, they posted with their real names.  That would allow the business to follow up and keep fraudulent posts from occurring. After all, if it is truthful and a fact, there is no reason to have a pseudonym.
Apr 3, 2014 5:21PM
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The problem with yelp is it is mostly the complainers that will write a review.  I use to stay at a cheap hotel, so everything was out of date.  It wasn't nice but it was clean.  People would write bad reviews, because they expected to pay $50 a night and get $300 a night rooms. I wrote 1 yelp review for a car dealership that ripped me off.  It was filtered and surprise they advertise on yelp.  

I don't really trust yelp reviews to much.  


Apr 3, 2014 4:58PM
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Makes for an easy way for companies to pose as customers of other businesses and discredit them.  Whoever uses these types of sites and takes them serious without doing any actual informed research is an idiot.   As anyone can sign up and make multiple accounts easily.  As only a first and last name, email and password are required to setup an account.  Probably why Yelp is floundering about turning over the identity of posters is because they have no idea who they are.

Apr 3, 2014 4:58PM
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Yelp is for whiners and scam artist..
Apr 3, 2014 5:32PM
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I looked up a restaurant that I go to on a regular basis and I saw a few reviews that were bad and did a little research and found a lot of stupid people  use the same name on all web sites and found this person had not even been in the state for more than a year and yet was posting. I found him on Facebook and others where he posted every day so he was easy to track. Try a place yourself and see if it is good
Apr 3, 2014 4:49PM
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Some online reviews are priceless. These are the ones that anecdote a transaction experience with specifics (make, model, service contracted; dates, names, prices, etc.) and indicate what happened that was either pleasing or not pleasing to the reviewer. Characterizations of these specifics may follow, but not necessarily.

 

In any case, the characterizations are unnecessary; the anecdote tells us all we need (or want) to know. Unsupported (and unsupportable!) naysaying of a business or a person may be allowed. But a court challenge to this speech must also. Yelp and others needs to monitor unsupported naysaying, because they must also be part of what can wind up in court.

Apr 3, 2014 4:56PM
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In November, Yelp hired lobbyist Laurent Crenshaw, who previously worked for California Republican Darrell Issa,

 

So much for Yelp being respectable!!

Apr 3, 2014 5:21PM
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People complain, no matter what.  One person's Saint is another man's Demon.
Apr 3, 2014 5:42PM
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Kind of like what a lot of poor business managers do to good former employees - zing them with bad references.  Often there is no way for the employee to find out what is being said about them, and no one seems all that concerned with whether or not the things being said are even accurate, in context, or truthful.

Reference slamming is very common, but you never hear about it.  Essentially, a former employer can say whatever they want to about you, but you can never "bad mouth" a former employer.  It's an absurd double standard.
Apr 3, 2014 5:52PM
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Why would I believe ANYTHING that appears on the media in any form?
Apr 3, 2014 5:54PM
Apr 3, 2014 5:50PM
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They do fight dirty. I own a small retail franchise business in my small town, and if you Google the parent and my town the first hit is Yelp with the headline that we're closed! I've sent several requests for them to correct this but I guess I have to pay their ransom to get them to fix this.
Apr 3, 2014 6:34PM
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AM I WRONG?. I do believe that I've seen frequent ads on Craig's List in which someone is offering to write reviews for a fee. I scoff at the utterly dishonest despicable act, and as a result, I'm NOT SURE if these ads were for "YELP" reviews, but just like those for "Facebook", which promise one Thousand  "Likes" within a 24 hour period, I find it all disgusting, and appalling.

 

Where does "TRUTH IN ADVERTISING"  fit into this picture?


Apr 3, 2014 5:38PM
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I went to get a pizza from my local pizza shop and when I got it home the cheese had stuck to the top of the box. I am going to write a scathing review of this shop, The pizza is great, but that would be boring and people that write scathing reviews are hip. Yelp is a waste of time and does more harm than good...unless you are hip.
Apr 3, 2014 6:12PM
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At what point do these reviews become cyber-bullying? A person with malicious intent could easily destroy the on-line reputation of a small company.  There has to be some legal protection to avoid this. Hiding behind " free speech" doesn't work when there are real consequences for the business. Especially if the complaint isn't real.  Maybe there should be a required note to see if the reviewer made any effort to remedy their complaint with the business before it is allowed to be posted.
Apr 3, 2014 5:24PM
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I think most people that are smart enough to research reviews in the first place are smart enough to know the difference between a legitimate bad review and someone just ranting.  Some of the small businesses near me deserve bad reviews.  I find that the ones ran entirely by family usually suck at customer service and could not care less because they know mom and dad are not going to fire their son, daughter, niece or nephew.  Tressler plumbing in town was one we had a bad experience with, all Tressler family members out to gouge you for everything they can and treat you like crap while doing it. 

I also had a wonderful experience with a small furniture business in town that not only delivered my leather couch for free, but the delivery men gave me a rose with their card stapled to the tissue paper, I thought that was sweet.  I usually do not use yelp, but mainly amazon, tripadvisor and for services I check the BBB.
Apr 3, 2014 5:23PM
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yelp lost credibility when businesses started offering discounts to their customers if they "liked" them on yelp, or facebook for that matter. I do find it interesting be a manager at a big corpoation that does business in over 20 countries, that I do get calls from yelp every few months, I used to take the time to explain that our advertising is all done though our corporate headquarters, some times they will then ask for their #, to which I have to pause in amazement and wonder if they live under a rock, (I work for a very very big corporation). Now I just hang up the phone, I do get a laugh at the reviews. Only pissed off consumers use yelp, happy people are the exception, pissed people are the rule! yelp should be synonymous with BBB complaints! 
Apr 4, 2014 10:41AM
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He must have something to fear if he getting bad reports.


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YELP BIGGEST SCAM EVER!!  If you have something nasty to say identify yourself!  Some of these review are written by fired employees!  Have heard 3 seperate Judge Judy cases with people where they said yelp  told them they will delete the bad comments if you advertise with them??  Our restaurant has recieved some of those comments I wish I could answer them to see if THEY ARE A FOOD CRITIC!!!  Weve been there for 40 years family owned If you don't like the food or service DON'T GO BACK!!  Weve been voted #1 in the county 14 times!  So go to APPLEBEES"S OLIVE GARDEN somewhere where they can afford 20 servers on staff because they get those government grants to PAY the HELP!  We actually have to pay our people ourselves!
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