Yelp review lawsuit is much more important than most realize

Defamation. Freedom of speech. Honesty and transparency versus lies and coverups. These and other gray matters are all in play in a $750,000 lawsuit filed by a Virginia contractor against a former customer who left a scathing review on review sites Yelp and Angie’s List. If it gets settled in court, the ramifications will be felt by both the review industry as well as millions of small businesses around the country.

If Christopher Dietz, owner of Dietz Development LLC, wins the lawsuit, many consumers will become fearful of posting reviews that call out businesses. If Jane Perez, the woman who wrote the reviews, gets out of the lawsuit unscathed, reviewers will be empowered to use reviews as a way to damage the reputation of businesses they don’t like. There is more hanging in the balance of this lawsuit than a contractor’s lost business revenue and an unhappy customer’s right to tell her story. This will set a precedent in an arena that is devoid of clarity.

It’s not just an issue between the two parties. It’s something that will change the review industry, the small business atmosphere, and the power of consumer transparency regardless of which way the lawsuit goes.

The negatives if Dietz wins

In many ways, small businesses are held hostage by review sites. Savvy business owners are forced to monitor and in many cases manage their online reputation to avoid reviews that can hurt their bottom line. When bad reviews pop up, they must respond swiftly and go into damage-control mode; 70% of consumers claim to trust user generated online reviews. In the Virginia case, Dietz claims that he has lost over $300,000 in business because of the review itself, particular the portion that insinuates that he was connected to the theft of jewelry from the house. This portion of the review as well as a portion that improperly defines summary judgment were removed from the reviews by order through a preliminary injunction from the court.

It’s a minor victory for Dietz, but not enough to offset the defeat he’s already forcing upon his business. Other reviews are popping up now that discuss the lawsuit itself. These will certainly damage his business, possibly more than the original review, and because the statements are indisputable, they will not be removed. Here are some of the ones currently up on the site:

Despite the negative press that his business is getting, it is nothing compared to the damage that will be done to the review industry if he wins the lawsuit. The best thing going for review sites is that they offer an outlet through which businesses can be held accountable. “Word of mouth” has been replaced in recent years by “word of mouse”. It has put businesses on the defensive, but it has also forced them to change many practices that were once relatively harmless but that could cause major problems today.

Review sites such as Yelp rank very well in Google for business names, giving people an easy way to discover from other consumers how the company operates their business and treats their customers. Setting a precedent that businesses can win lawsuits against reviewers will discourage a large percentage of people who may want to speak out but who don’t want to go through the hassle and potential damage they may incur by writing a bad review. They will be burdened with the need to prove their claims. It will weaken both the power and validity of reviews altogether, hampering the already-crowded industry and removing a powerful tool that consumers currently use to keep each other informed.

The negatives if Perez wins

Today, businesses must constantly “watch their backs” online. Some have been forced to train their employees to try to ensure strong reviews. Others hire outside firms to handle their online reputation. If Perez comes out of this without paying money or removing her post, freedom of speech has officially trumped defamation and a precedent will have been set.

On the surface, this will appear to be a good thing. The ugly head of censorship that has been popping up around every corner will have been dealt a blow. Unfortunately, the freedom to post damaging, defamatory reviews without fear of repercussions will also be more in play than it is today. Word will spread that the customer is always right, even on review sites. An atmosphere of “seller beware” will prevail and grow.

It won’t last long. The media will soon after shift its focus and start highlighting the poor businesses that are damaged by fake reviews. They will find small business owners who are all too willing to tell their story of the review blackmail and “social terrorists” who have ruined their business.

In the end, if Perez wins, regardless of whether her initial claims were warranted or not, the online review system will become less powerful. It will gain its own reputation of being untrustworthy and consumers will have lost an important tool.

This must be resolved outside of court

The only way that this whole situation won’t end badly is if there is no precedent set. Right now, we’re in a review world of blissful ignorance. Consumers trust them because they’re all that we have. Businesses must abide by them because their customers are now empowered. It’s far from a perfect system and will continue to improve, but once the government and judicial systems step in and find for one side or the other, everything changes for the worse. For once, it’s best to let this beast stay hidden, to let each individual instance of fallacy on either side sort itself out.

If this comes to judgment, the results will be a bad one for everyone involved regardless of who wins. In the end, we all lose.