Yelp Fighting Back Against Bad Review Lawsuits

Yelp (NYSE:YELP) is now publicly shaming businesses that threaten to sue their customers for negative reviews. Now, any businesses that files a lawsuit, or threatens to file a lawsuit, because of a bad review will have their page marked with a public warning. Yelp’s senior vice president, Vince Sollitto announced the policy in a blog post on the site.

The warning will take the form of a pop-up alert that reads, “Consumer Alert: Questionable Legal Threats. This business may be trying to abuse the legal system in an effort to stifle free speech, including issuing questionable legal threats against reviewers. As a reminder, reviewers who share their experiences have a First Amendment right to express their opinions on Yelp.”

Yelp says the new system will allow consumers to further protect themselves from bad businesses. The warning would be a digital scarlet letter for any business that has its Yelp page marked with it. Users must click a button acknowledging the popup before they can read or post reviews for these businesses. It is a common belief that consumers will simply navigate away from these pages to businesses without the warning.

There is ample reason for Yelp to be taking this action. Business owners have been going to court to battle the customers who post negative ratings and sassy reviews. Yelp says its wants to make sure users are aware of the potential trouble they could get into with posting negative reviews for certain companies.

In Dallas, Prestigious Pets, a pet-sitting service, sued a customer after she posted a one-star review, claiming that the customer violated a non-disparagement clause. The customer claimed that their fish was overfed by Prestigious Pets, discovered through a camera mounted on their fishbowl. The client also cited difficulty contacting their pet sitters as well as confusing fees as some of the reasons they did not enjoy their experience. The customer claimed that the one star was for “potentially harming my fish, otherwise it would have been 2 stars.”

Prestigious Pets has been branded with the consumer alert. Another warning can be found on the page of a moving and storage company that has had an ongoing legal battle with a customer for defamation.

The Consumer Review Fairness Act, was introduced in Congress earlier this year to deal with these types of issues. The Consumer Review Fairness Act prohibits inclusion of gag clauses in contracts. Another federal bill, called the SPEAK FREE Act, focuses on protecting consumers from lawsuits. Yelp says that both bills “are important and will work together to protect your First Amendment right to express your opinions online.”

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