Yelp.com: Extortion or free speech? Lawsuits mount

Yelp lawsuitsAs merchants line up to join the lawsuit against Yelp for allegedly downgrading their ratings when they did not advertise, the debate over the import and impact of online reviews has never been more heated. From other online sites touting their more pristine approaches, to merchants insisting that negative reviews can only help -- honest! -- perspectives are as diverse as opinions expressed in the online reviews themselves.

You would expect nothing more, or less, from the Web.

"It's the Wild West out there," Scott Steinberg, head of online consultancy at TechSavvy Global, told WalletPop. "What it really comes down to is there needs to be a better system for policing and controlling reviews."

San Francisco furniture refurbisher Boris Levitt could not agree more. He is among the three businesses that filed suit on March 12, claiming that after he declined to advertise last July, some positive reviews disappeared, giving more weight to one very negative one. His star rating fell and his Web hits plunged. "It was 261, then it was 158, and a couple of months later it was 60 or something like that," Levitt said. "Accordingly, my income went down: 20% down on page views, 20% down on income."

On the other hand, a number of tech industry experts said negative reviews validate the positive ones.

"Most reviews are positive -- that softens the whole discussion of reviews," said Jim McCarthy, CEO of the discount ticket site Goldstar, which was the first to solicit reviews of live entertainment from its customers. "Most people can filter if they see 19-20 good reviews and 1-2 not so good reviews. They're going to understand the world is made up of a lot of different opinions."

Negative reviews actually are Yelp's best defense. Luther Lowe, manager of local business outreach for the company, points out that "very few businesses who advertise have universally positive reviews." Lowe asks: Why would advertisers not delete those reviews if offered the opportunity in return for their business?

Brett Birman's site, www.avoiditnyc.com, is all about negative. Birman launched the site in January after he had his own Yelp epiphany. Birman felt he was scammed by a dentist who told him he had nine cavities -- a second opinion from his family dentist turned up only one -- but he worried that "if I posted on Yelp, there would be 10 other positive reviews and the dentist could ignore it and the users could ignore it."

No risk of that on avoiditnyc.com, where the featured "Thumb War of the Day" is a review of a restaurant called Pita Grill that begins, "Bland, barely edible food..." Businesses' only recourse is through an online reconciliation process, which appears in the form of an asterisk and red type. Pita Grill, for instance, has an asterisk followed by the following information: "The owner or manager of this Business/Establishment/Topic apologized to me for my bad experience(s), is aware of this review, and will attempt to resolve their issue(s) going forward."

"I want the businesses to have to see where they're going wrong, the users to feel good about getting something off their chest," Birman said. "The whole point of a negative review is not to bash somebody but to improve your operation."

At Gettington.com, a mass merchant retail site offering a high tech version of layaways and goodie bags, general manager Paula Drum said negative reviews give the company valuable feedback and a chance to make amends.

"Sometimes you can convert people who are very disappointed into huge advocates of your brand because of the way you listened to them and tried to respond to their concerns," Drum said. "Sometimes they will go back and begin to advocate for you."

Levitt said he tried to do just that via Yelp with the writer of his sole one-star review, but he claims the author never received his overtures that way. He believes he was blocked by Yelp, a perspective the company generally characterizes as a conspiracy theory. Levitt said he knew who his harshest critic was -- "We had had hard conversations here," he said. -- and eventually reached her via Facebook. One hour later, he said, her review was gone.

A new age of customer reviews may come with Twitter, according to Steinberg with TechSavvy Global, where customers tweet about their experiences in real time and business owners can tweet right back on an equal footing.

"We need better tools for two-way communication, creating a conversation with customers," he said.

In the past, the biggest problem with reviews was that they could be easily manipulated, with companies asking friends to chime in or discrediting competitors. In one celebrated case, the computer gear company Belkin issued an apology for spiking reviews by paying people to write them.

Sites have installed safety measures, ranging from electronic filters to employee reviews. Yelp maintains its filtering system -- which it will not fully explain for fear people would be able to breech it -- could ironically be at the crux of the claims in the lawsuit. The algorithm they use, Lowe said, may accidentally remove some bona fide reviews from the public's view.

"The review filter drives everyone crazy; it drives us crazy," Lowe said. Some real reviews will be inadvertently lost in the automated process, he said, but it's worth it to get "rid of most of the malicious content."

Levitt is not buying it. "I really don't care what it is -- algorithm problem, computer programmer," he said. "The computer is not smarter than the person sitting in front of it. You created that monster."

The true Wild West aspect of the Web is not reviews, but the wide variety of ways sites make money. Unlike the newspaper model -- where reputable papers attempted to keep up a wall between advertising and editorial -- Web sites may profit not only from advertising by a business they include on their site, but they may charge for that inclusion as well as profit from such user behavior as clicks on a product or purchase of an item. That, in turn, creates an incentive for positive reviews.

In some ways, Yelp was created to avoid some of these conflicts, moving away from the Yellow Pages online model, where businesses paid to appear, to get larger and bolder type, etc. But its model has problems, too, experts said.

"The problem for Yelp is this idea of a merchant-funded feedback site," said McCarthy, of Goldstar. "That has an inherent conflict of interest. It really does make sense for them to advantage their advertisers. I don't think they did that, but the inherent conflict is sitting there."

So who can a consumer trust? Surveys consistently show that word of mouth trumps all other sources of information and increasingly a seemingly average Joe review on the Web qualifies as word of mouth. Scott Testa, a technology consultant and business professor at Cabrini College near Philadelphia, said that while the Yelp suit may open the floodgates to criticism of criticism, the best bet for consumers is to read widely and with skepticism.

"Not trying to sound too much like an academic, but I take everything I hear and read and try to triangulate the data," Testa said. "If I see 10 good reviews and one bad review, I take that with a grain of salt."

Increase your money and finance knowledge from home

How to Buy a Car

How to get the best deal and buy a car with confidence.

View Course »

Getting out of debt

Everyone hates debt. Get out of it.

View Course »

Add a Comment

*0 / 3000 Character Maximum