Will Court’s Bad Review and Studies Slap Yelp into Using Best Practices?



Yelp says it’s now taking steps to prevent fake reviews.

But can we truly expect a new standard in online consumer reviews? Hopefully, yes, after Yelp’s 2014 court loss and studies that reveal many Yelp’s consumer reviews are bogus.

Online consumer reviews can be a good thing, but not if they’re phony. According to a Harvard Business School study, 16 percent of Yelp’s restaurant reviews are fake.

There’s more damaging news about Yelp’s business model via a study by market research firm Gartner.

Regarding Yelp’s loss in court, the Virginia Court of Appeals slapped Yelp with a bad review (see court’s opinion). It ruled the Web site must release the names of negative-clandestine reviewers.

Actually, Yelp was held in contempt earlier by a lower court. The company flouted the justice system when it refused to comply with a subpoena in a ruling by the Circuit Court for the City of Alexandria.

Later, the higher court ruled Yelp must reveal the names of seven alleged reviewers of a Virginia carpet cleaning business, Haddeed Carpet Cleaning.

Court Orders Yelp To Identify Anonymous Reviewers

The small business owner convinced the court the seven reviewers were bogus because they weren’t authentic customers. He said he couldn’t “match defendants’ reviews with actual customers in its database.”

By making bogus claims, the reviewers weren’t eligible for protection under the First Amendment, according to the court.

The attorney, Raighney Delaney who represented the carpet cleaning business, raised a valid point.

“Yelp said that all the posts had different IP addresses, but how many IP addresses does one person have between all their devices?” Mr. Delaney said. “It would be easy to create a number of different fake accounts.”

The small business won despite formidable opposition.

Candidly, it’s disappointing that journalists failed to show good judgment in this case. Friend of the court briefs supporting Yelp were filed by the American Society of News Editors, Gannett, Reporters Committee for Freedom of the Press and The Washington Post.

But the journalists proved to be inconsistent — in other situations, they continually harp for transparency and with regularity sue for their freedom of information.

Plus, credentialed journalists should know better than anyone else from journalism 101 — bogus libel and slander aren’t defensible in court.

Balanced perspective

As a credentialed journalist and a business performance consultant, my experience prompts me to have a balanced perspective:

1. In America, the accused have a right to address accusers. Plus, courts have a presumption of innocence until the defendant is proven guilty. Only after convicted in a court of law, can journalists negatively label a person.

2. Yelp does not have a reasonable system in place to screen bogus reviewers. Nineteen companies have been fined $350,000 for posting bogus Yelp reviews (New York Cracks Down On Fake Yelp Reviews – Business Insider).

3. Yelp disingenuously hides reviews. If a company has hidden positive or negative reviews, Yelp does a disservice to consumers and businesses, alike. Such reviews are impossible to investigate.

4. Hidden reviews prevent a positive outcome. A company is prevented from addressing the valid concerns of negative reviewers and leading to positive outcomes.

5. Yelp is disingenuous with businesses. Yelp is unresponsive and doesn’t cooperate with well-intentioned business owners who want to address hidden reviews. (As consultant and writer, I’ve seen this unfortunate movie on numerous occasions.)

6. Yelp profits from a conflict of interest. Yelp profits from bad reviews. It tries selling advertising to businesses. This means a business owner feels extortion by Yelp to filter reviews down the list or to delete them.

7. Transparency is best. In this age of cybercrime, there are many disingenuous sources of fake reviews — from jealous competitors and power-hungry bloggers to cybercriminals with an ax to grind.

8. Hidden reviews even hurt authentic reviewers. Yelp’s business model prevents the consumer from enjoying an enhanced relationship with a business. A savvy business often wants to reward loyal customers with better deals.

Yelp is a San Francisco company. So is it domiciled in California? No. Guess where it’s domiciled?

In Delaware — for favorable tax treatment.

Yelp has agents in every state. That’s a good thing to know as a business owner, if you’ve been unfairly treated by Yelp and need to take legal action against phony reviews that hurt your reputation.

Yelp should be slapped for not screening bogus reviews and its conflict of interest of profiting from alleged bad reviews.

Bogus clandestine libel doesn’t qualify for free speech protection. Yelp needs a productive business model with best practices.

From the Coach’s Corner, related content:

14 Tips to Profit from Online Customer Reviews – For competitiveness and profits, businesses can’t afford to ignore the potential of online reviews. They’re a factor in revolutionizing commerce.

Are You Attacked by Bad or Bogus Reviews? 5 Tips to Respond — Certainly you only want positive customer reviews. Internet-savvy shoppers read reviews to make buying decisions. Reviews can make or break you.

Best Practices to Manage Your Global Brand, Web ReputationAs you no doubt know, the digital age has brought new challenges and opportunities. Best practices are critical in order to maximize your Web presence and to manage your online reputation.

10 Tips for Hiring the Right Attorney for Your BusinessIn running a successful business, you typically need the services of three professionals — a good tax accountant or CPA, insurance agent and an attorney. Know that talent and skill levels are crucial for your success.

Think 1930s for Business Success. Consumer Attitudes are Changing.Hyper-consumerism is history. Traditional values with a purpose are in vogue. Traditional values – old-fashioned, if you prefer – describe the new mindset of consumers and what they expect from business.

“Every time you dig up something from the past, you give more meaning to the present.” 

-Robert Taylor, from the movie: Valley of the Kings


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Author Terry Corbell has written innumerable online business-enhancement articles, and is a business-performance consultant and profit professional. Click here to see his management services. For a complimentary chat about your business situation or to schedule him as a speaker, consultant or author, please contact Terry.





Seattle business consultant Terry Corbell provides high-performance management services and strategies.