As I previously discussed in the post Yelp Extortion, there was recently a Sacramento business owner who was blatantly extorted through Yelp. This story has picked up steam and is receiving a lot of attention. The Huffington Post recently wrote an article on the business and the business owner will be appearing on a national news television show this week to further bring light to these horrible tactics. We have received several inquires regarding the subject and thought we would follow up with additional information.
Yelp is a fantastic tool that many people use to determine whether to they want to check out a restaurant or use a business’ services. However, this tool has turned in heartache for many business owners who now face negative fake reviews from the competition and extortion from customers. There have been several class action lawsuits against Yelp; however, the Communications Decency Act makes this route very difficult. Essentially, the Act protects websites, like Yelp and Google, from lawsuits for user generated content. There are alternatives to suing Yelp. The most common is defamation against the individual who wrote the fake review.
Last month, a case on appeal in Missouri was completed: The Fireworks Restoration Company v. Hosto. In this case, a business owner was the victim of three fake online reviews from a previous co-owner/business partner. The culprit used the names of actual customers to write the negative reviews. Here is one of the negative reviews:
“Grade: F. Dealing with these people was the single biggest mistake I have ever made in my whole life. I[t] was a miserable experience and the job was done so poorly we decided to sell the house. They were great salesman [sic] but their workman [sic] were idiots and the owner was not willing to help in any way․ I was so happy just to get them out of my life I paid them much more than I should have because their law firm threatened to lien my house if I disagree[d] with any part of their bill․ All I can say is ․ if they show up in your front yard in the middle of the night after your house catchs [sic] on fire, RUN! Do yourself a favor and call your insurance company and get a referal [sic] for legitimate business people.”
This review was on Yahoo for two months and on Google for two years. I’m sure you can imagine the negative effects and repercussions felt by the business owner in this particular case. The victim in this case received an award of $1 for lost profits, and $150,000 in punitive damages. More importantly, the court stated the following in a footnote:
“We reject Defendant’s contention that Plaintiff needed to produce testimony from potential customers who opted to turn elsewhere due to the web reviews. With the internet, consumers are able to compare businesses and their wares with unprecedented speed. Interpersonal contact is characteristically absent, so if a consumer declines to engage a business it encounters on the internet, that consumer continues his or her search and the business has no knowledge it has been passed by. As such, it would be unreasonably burdensome to impose upon a business plaintiff the requirement that it locate potential customers that it never knew in order to successfully demonstrate actual damage to its reputation. The deleterious impact of such a constraint far outweighs any benefits it would have in proving reputational harm.”
This footnote demonstrates that you do not necessarily need proof of lost profits due to the negative review. Although proof of lost damages is obviously much better, you might be entitled to damages even if your proof is slightly lacking. Contact us today if you are the victim of a fake negative review. We can help determine whether you have a viable case and help put a stop to these horrible tactics. Stay tuned for our next post discussing Trademark Law and Yelp.
By: Trevor Carson Google
*The information provided in this post does not constitute legal advice or opinion. The information is for guidance purposes only. Individual situations vary and you should contact us for a consultation.
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