A Virginia woman is in the process of being sued for $750,000 for allegedly writing a bad review of a company on Yelp. Christopher Dietz, the owner of the company, is suing for defamation. He owns a seven-year-old construction company that previously held a good reputation. In her Yelp review, Jane Perez allegedly claims that the company charged her for work not done, damaged her home and stole her jewelry. Dietz claims $300,000 in costs because of her negative review over lost work opportunities, insult, mental suffering, anxiety and harm to the company's reputation. The plaintiff and defendant are rumored to be high school classmates.
Ratings Impact Sales
This company is not the first to sue for a negative review on a website like Yelp. There are a growing number of lawsuits in the United States over posts on websites such as Yelp. With 84 million visitors and 33 million reviews written each month, Yelp is a popular place for consumers to look for information. A Harvard study showed that a one star increase in rating on Yelp yields a 5-9% increase in revenue for a company. This suggests that online reviews are important to a company's reputation and success.
These types of lawsuits are becoming increasingly popular and some lawyers are suggesting that those companies who feel threatened are more likely to file these types of suits. Many lawyers are pursuing these cases more rigorously because of how detrimental these sorts of reviews can be to companies. Consumers may directly or indirectly come across these negative reviews either as users of the review service or by stumbling upon it through a Google search. Either way, if one of the first reviews readers stumble upon is negative, and to a greater extent harshly negative, this could result in the company's revenue dropping as much as 70%.
A Question of Truth
This lawsuit certainly isn't the first of its kind. Recently a company won a 1.6 million lawsuit against a blogger who accused another company of stealing money. These lawsuits are tricky since they present a conflict between freedom of speech and a company's online persona. Freedom of speech, however, doesn't extend to defamatory statements. Since defamation must be based on a false statement in order for the writer to be held liable, lawyers advise writers of these reviews to stick to opinions and truths. If you don't lie, misrepresent yourself or exaggerate your experience, you should not be held liable. Being able to separate emotions from your situation will help to ensure that you, as a reviewer, will be protected from such lawsuits.
Many online defamation lawsuits fail, but in the case of Jane Perez's review, a temporary injunction has been granted against the defendant to prevent her from continuing to write defamatory statements online. Dietz claims he did complete the work outlined in the contract and Perez allegedly didn't want to pay. Dietz filed an initial suit against her and it was after this that she allegedly started writing defamatory statements about his company.
The Bottom Line
Yelp encourages its users to be honest regarding their experiences but also does not take responsibility for what users say. Users are always cautioned to omit excessive exaggeration and should know not to lie on a review. Although First Amendment rights are important and must be upheld, deliberately sabotaging the viability of a business must also be discouraged. Outright lying is considered defamation and individuals who take part in these types of activities can and will be held liable. If users of Yelp are honest and truthful ,then a company should not be able to sue for defamation simply because it won't match the definition of the action.