This month, the Supreme Court is set to make a decision that could set an important precedent about Yelp reviews and free speech, the Wall Street Journal reports.
The case in question involves Joe Hadeed, the owner of a carpet cleaning business in Virginia. In early 2012, Hadeed started receiving a string of very harsh reviews on his company’s Yelp page. According to Hadeed, business sank 30% in 2012 following the string of negative reviews, and revenue fell from $US12 million in 2011 to $US9.5 million in 2012. He subsequently had to lay off 80 workers and sell six trucks.
He claims that at least seven of the negative reviews are fake, because he couldn’t match them to actual customers based on time, location, and sales data. Hadeed sued those seven reviewers for defamation and demanded that Yelp reveal their true identities. The Alexandria Circuit Court and the Virginia Court of Appeals have both sided with Hadeed, holding Yelp in contempt for not giving up the names. In January, Yelp appealed to the state Supreme Court, saying that the reviews are protected under the First Amendment and that Hadeed offered little evidence that they were fake. The Supreme Court will either grant or deny Yelp’s appeal, or schedule a hearing in Virginia.
This case reflects a growing issue for Yelp, which defends the right of its users to express their opinions without being “harassed and intimidated” by the businesses they review. If the Virginia Supreme Court rules that Yelp is in contempt for not handing over the names, more business owners might sue reviewers in the future.
The Federal Trade Commission has recieved more than 2,000 complaints about Yelp since 2008, mainly from small business owners angry about unfair or fraudulent reviews.
In an additional twist, The Wall Street Journal reports that many of the FTC complaints state that the negative reviews started populating their pages after they turned down a pitch from Yelp to advertise on the site. Yelp denies any connection between reviews and advertising.
Consumer-review sites like Yelp are protected from defamation claims because of user comments under the Communications Decency Act of 1996, but small business owners are often left feeling helpless and unable to defend their company. Businesses who take individuals to court over online criticism rarely win, and the companies that host the reviews, like Yelp, are protected.
In November, the Wall Street Journal reports that Yelp hired a lobbyist to push for a federal “Anti-Slapp” law, which would prevent businesses from filing lawsuits against their critics without concrete facts to support their case.