California has passed a bill that protects customers from getting penalized by companies after writing bad reviews.
Yelp’s response: Yippee!
In a blog post published Wednesday, Yelp said that it sometimes hears about businesses that sneak clauses into consumer contracts that forbid customers from leaving negative reviews on sites like Yelp.
Such non-disparagement contracts threaten fines or legal action that work against the sharing of honest customer experiences, Yelp said:
These types of non-disparagement contracts not only seek to intimidate potential reviewers away from sharing their honest experiences online, but also threaten to deprive the public of useful consumer information.
A five-star rating for a business who had used one of these clauses to simply scare all negative reviewers into removing their comments wouldn’t really represent the experience a consumer could expect to have at that business in our opinion.
Businesses that have pulled this shtick include a swanky New York hotel that got into hot water this summer when it told wedding couples that it would deduct $500 from their deposit for any guest who groused about it online.
But more to the point of the California bill, nicknamed the “Yelp Bill”, is the story of the couple who inspired its passage.
The Utah couple, John and Jennifer Palmer, received an email from online retailer KlearGear saying they’d have to pay $3,500 unless they removed a comment they had posted three years earlier to the review site RipoffReport.com.
They had posted the review over an order that never came: a less than $20 order of “a perpetual-motion desk toy and a bendable smiley-face keychain” that were to be Christmas gifts to Jennifer from John.
The Palmers prevailed in Utah federal court after KlearGear didn’t bother to show up.
Then-speaker John A. Pérez was inspired by the Palmers to introduce the Yelp Bill. California Gov. Jerry Brown signed it into law on Tuesday.
The bill protects consumers’ rights to leave reviews, making it unlawful to threaten or penalize a consumer for making statements protected under the bill.
The bill imposes civil penalties of $2500 for initial violations and $5000 for subsequent violations, as well as a penalty of $10,000 if the violation was willful, intentional or reckless.
The bill goes into force in California in 2015.
It’s a big win for consumer rights. What’s left in its wake, of course, are the businesses that are struggling to deal with review sites such as Yelp that can make or break them.
For example, earlier this month, a federal appeals court threw out a class action suit that accused Yelp of “extorting” small businesses by tying positive and negative reviews to the purchase of advertising contracts worth $300 to $1200 a month.
As well, we saw in the spring how reviewers can act as a virtual lynch mob when some Google Glass users panned a restaurant, without ever having stepped foot in the place, over its request that patrons not wear the gadgets while dining.
Such reviews don’t merit the protection given to honest opinions and wouldn’t be protected under a bill such as California’s.
Some are saying the legislation is excessive, given that existing laws protect consumers well enough.
But in making non-disparagement clauses illegal to begin with, one hopes that a bill like this would prevent consumers getting dragged into costly court battles to begin with.
Readers, what do you think? Excessive legislation, or a necessary check to businesses trying to scare reviewers away?
Let us know your thoughts in the comments section below.
Image of Yelp courtesy of Gil C / Shutterstock.com.
26 comments on “‘Yelp Bill’ protects Californians from getting pants sued off over reviews”
Yelp, and other review sites, are worthless to me. If you look at Amazon reviews, it’s full of people reviewing products before they’ve been released for sale, never bought the product from Amazon, or owned the product for all of 19 seconds before writing the review. These reviews, and the ones on Yelp, are more emotional rant and less fact based. Couple all of that with the services that a business can use to write fake positive reviews and it devalues what Yelp is trying to do.
If Yelp really wanted to put some honesty into its reviews. It would find a way in verify purchases via a unique QR code that’s printed on receipts, and that’s something that could be sold to businesses. This way a reader can filter out the fake reviews and focus on the legit ones. Amazon did this with its verified purchase tag – and it’s funny how many reviews are not verified purchases.
Andy, excellent suggestion. There needs to be some sort of verification for reviews. These days you can buy reviews on almost every website so it has become really hard to find out how genuine a review is.
“Your search results are your reputation online. ReputationDefender® offers proven solutions to suppress negative search results and replace them with accurate, positive content you control. We offer custom solutions for doctors, lawyers, SMBs, and all other professionals who depend on their reputations for their livelihoods.”
That message is the first thing that you see when you go out to the reputationdefender website. Now, excuse me for saying this, you want to sue someone for their opinion… if you run a company and “…depend on their reputations for their livelihoods.” then maybe you should consider listening to the bad reviews and not just the good or the made up reviews by companies like this because there just may be something there.
ReputationDefender changed its name to Reputation.com in January 2011. It charges thousands of dollars to companies who want to use its services. Wikipedia states: “It provides software and services intended to push down or remove negative information and create higher-ranking content from a company or individual.” According to The New York Times, Reputation.com is popular, but controversial, due to its efforts to remove negative information that may be of public interest.
I agree that sites like Trip Adviser should make elementary checks that postings are authentic and from actual customers of the establishment they are reporting. But companies like Reputation.com are making vast amounts of money from businesses that should have a proper and inexpensive means of redress.
Maybe you should actually go out to the website and read the what I quoted from the site. As far as “redress” is concerned, no you cannot please everybody but then you shouldn’t try to REPRESS what you don’t like, maybe fixing the problem would be a cheaper solution then trying to sue people.
Sounds a lot like the Good Samaritan law.
Where common sense won’t prevail, all we are left with is legislation.
In the Homeland this is a win over corporate fascism , YEZZZ!
This law needs to be applied carefully, but should be welcomed. In the UK we have stories about people who leave poor reviews on sites such as Trip Adviser and others that are very disparaging – despite the reviewer never having visited the establishment at all! Such ‘reviews’ would seem to be not allowed by this state law, so that’s good. But it must encourage honest reviews that can be believed by those reading, unlike some reviews that are OTT.
This should become national. More important is a national law prohibiting vendor agreements from imposing binding arbitration when a dispute arises between the vendor and a consumer
Or, consumers can put an end to this by reading terms of service and not blankly signing on the line. If customers used the power of the dollar and didn’t do business with places that did this kind of nonsense, the business would either die on its hill or change its practices to match what consumers find acceptable.
Often, there is nowhere else for a consumer to go; some businesses are monopolies that have little to no competition. Competitors in the same industry usually impose similar terms of service upon consumers. Forced binding arbitration often involves supposedly neutral lawyers who are associated in some way with the company against which a consumer has a grievance. Moreover, arbitration hearings are often held far from where a consumer lives.
By the way, many consumers can not understand terms of service (TOS) “agreements”, which are often written in dense legal language. But even consumers who can understand such “agreements” may find there are few, if any, competitors to which (s)he can turn.
Not excessive enough.
There is so much company-generated crap — and outdated or incorrect crap at that — on Yelp that it is refreshing that consumers now are free to update it.
I don’t trust online reviews for the most part. The best ones are in places where someone vets complaints, such as the BBB. Of course, the businesses on the receiving end of the bad reviews shouldn’t seek to “punish” the reviewers but are free to respond to any reviews they think are unfair.
I don’t give much credit to online reviews, but there should be a way for both parties to work out the issue and remove a bad review if the dispute is resolved.
I totally agree, people should be allowed to leave their GENUINE opinions.
For any company to attempt to stop that is not only despicable but gives the impression that the quality of their goods/services leave a lot to be desired.
I also feel that a restaurant/hotel/etc should be able to take legal action against those unscrupulous pathetic individuals who, in a desperate bid to have their 15 minutes of fame, leave adverse comments about something they have never experienced.
If you own a business and provide customers an excellent experience or the same experience you would expect from a business, you have nothing to worry about. You will never make everyone happy and will have some negative reviews but it won’t sink your business. I do however feel something should be put in place to remove illegitimate negative reviews. I do know of rival business owners getting people to post negative comments about their competitors.
Good news -customers and potential users have a right to know what the genuine experiences of others have been – if a service or product is not up to scratch , people deserve to know. The other side of the coin is that malicious and unwarranted complaints can ruin a business that is targeted by someone with no real complaint but , for whatever reasons (personal , just sheer spite or taking down a competitor) can be a peoblem .
I think one day, though I could be wrong, that you will have to verify your identify to do anything social or business online… Provide a license number, proof of your name, things like that. Proof that you are a real person, and not making an account solely for the purpose of trolling or some other conflict… Because creating one without some identification (even if it’s stolen) would be impossible, just like typing random numbers for a credit card isn’t going to grant you free money. (And numbers MUST match the name given, the birthdate, etc) And, the person could get notified if their card is used, because the system would show “two” of the same person. I think once we get rid of the anyomous advantage bad people have, we could catch many criminals and people who mean harm.
And I don’t think of it as invasion of privacy… The government can look up your info anytime they want, so unless you are really horrible at computer security, I don’t see what the difference is between that and having to identify yourself to pick up a package, to enter a club, to buy certain things, or to have a car and everything else we don’t stop to think: Privacy? What’s privacy when it’s all on a database?
OK… you first… what’s you real name and address?
You missed my point… I’m speaking of identifying yourself for a service… Not to prove a point to someone you don’t know who clearly disagrees. And yes, I use my real name on Facebook and my blog.
No one escapes giving out sensitive information. You have to submit it somewhere, multiple places to function easily and conveniently in society: DMV SSA, employer, bank, etc. If someone wants to, they could get a job to access it. Some people apply for cetain jobs BECAUSE they can get access. I know some places are trying to implement ways employees can’t do that, but it’s not as easy as you think, esp if multiple people are working on it from the inside, and know policies backwards and forwards as to get use them to their advantage.
I’m just saying the thought of total privacy in identification is an illusion and has been for a long time. Because it’s not just people in power who can get access… But tech-and-security-breaching savvy employees can, as well (part of the reason this site exists).
Umm, this issue was already dealt with in 1791. It’s called the First Amendment and it gives everyone in the United States the legal right to free speech, even if that speech is undesirable to others.
There are categories of speech not protected by the First Amendment. For example, libel, defamation, speech that leads to illegal activity and/or imminent violence, obscenity.
It’s virtually impossible to find anything on the web that doesn’t have negative reviews. No matter how good a product or service is, there are always people who are going to be negative just to be spiteful. You learn to deal with it. Thing is, if your service really is excellent, I see no reason why you should fear reviews – the good ones should vastly outnumber the negative ones regardless, unless you’re the victim of a targeted campaign or something.
At any rate, this whole thing is ridiculous. The idea that you could be financially punished for speaking ill of a service you find unsatisfactory… Look, I fully understand that the point of the 1st Amendment is to protect people from government infringement upon their right to free speech, but it’s friggin’ absurd that anyone should have the right to sue you or otherwise punish you simply for complaining. How could anyone think this business of, “Leave a good review or we’ll take your deposit” or what have you is acceptable?
You’d feel different as a business owner losing lots of customers because of reviews of people who never actually bought the product they are reviewing. To lie about a service that results in loss of sales IS punishable by law.
Now you should be allowed to leave a bad review… But again, when you cost a someone money without legitiment reason rooted in truth, you owe them money, in this society, and negative reviews can make one lose sales. Some would deserve that.
But there’s a difference between making general accusations of bad service, including a curse word and vehement thought, that calmly saying “I didn’t like it, and this is specifically WHY.” Explaining why merits your review, because “the service was awful” could mean anything to anyone.
I hate when servers spontaneously come up to the table and interrupt an obviously deep conversation I’m having with my spouse, when their eyes could just scan the glasses and napkins without intruding with a “how are things?” I come close to saying “we have plenty of drink, napkins, ketchup… how do you think we are doing?” I hate being interrupted in my thoughts, and they will often cut me off mid-sentence without hesitating to ask how things are. I personally don’t like that.
But a lot of people consider a waiter who doesn’t check on them every five minutes as bad service… I would LOVE a waiter that only inquires when we obviously need something at the table. So you see, “bad service” doesn’t give a fair evaluation as it is very vague, and could cost an otherwise legitimate business money, in which yes, you should be sued. Some complaints may be by people who are just impossible to please… and people WILL leave out any negotiation the business tried to make if they’re upset enough… And that’s not fair either.
I think negative reviews that doesn’t spell out the dissatisfaction should be regulated. People take reviews very seriously, and a business should be judged on the specifics of its service by the customer considering a visit, rather than someone who is irate and wants to “have her/his say” but too lazy to write an honest review. Vague comments are up to interpretation, and could mean eight different things in a room of 10 people. Yes we have free speech but our speech can and does effect others and could even infring on others’ rights. No, we don’t have the right to say whatever we want.
I think the first guys comment about only being able to leave a review by being the legitimate purchaser of a product or service via a code on your receipt is a fantastic idea. Why hasn’t someone filled this niche?