Yelp Should Be Liable For Ratings On Site

| by Mark Jones
Yelp users advertise the website at one of its local Hot Spots. Yelp users advertise the website at one of its local Hot Spots.

The popular business reviewing company should be held accountable for the ratings posted on its website.

Yelp’s purpose is “to connect people with great local businesses,” according to the San Francisco company’s website.  The review platform allows users to rate local businesses on a five-star scale.  Users also can post written evaluations of the businesses, detailing experiences with expediency, customer service, and product quality.

Currently, the website’s owners and operators are not responsible for the content on its website. This became obvious during a recent federal appeals court ruling.

On Sept. 12, federal courts addressed a lawsuit filed by Douglas Kimzey of Redmond, Washington. Kimzey filed the lawsuit after his business received a negative review on Yelp from user “Sarah K,” according to ABC.

Kimzey, who served as his own attorney, claimed that the negative review pertained to another business, not his, and that Yelp would not respond to his requests to remove the review unless he subscribed as a paying customer.

Courts dismissed the lawsuit, saying that the business owner’s allegations were “threadbare,” according to ABC.

“We fail to see how Yelp's rating system, which is based on rating inputs from third parties and which reduces this information into a single, aggregate metric is anything other than user-generated data,” said Circuit Judge M. Margaret McKeown, one of three judges presiding over the case.

While Judge McKeown is correct in stating that Yelp exclusively broadcasts reviews of third-party users, Yelp puts itself at risk by not monitoring the content on its website.

Courts called Kimzey’s allegations “threadbare.”  Consider, for a moment, the consequences of his allegations if they are true.

Every month, Yelp receives approximately 23 million unique mobile app users, 69 million unique mobile web users, and 73 million unique desktop users, according to metrics posted on the company’s website.  That is a lot of traffic for a website which claims to allow third party users to create all of its content.

Furthermore, people trust the information posted on Yelp. Harvard Business Professor Michael Luca conducted a study of the correlation between Yelp reviews and a business’ revenue.  Focusing specifically on restaurants in Seattle, Luca found that every additional star on an average Yelp rating lead to a 5 to 9 percent increase in revenue.

Negative reviews can be seriously detrimental to a small business. As a large, well-known website, Yelp must claim responsibility for the information posted on its website.

Despite the fact that federal courts ruled that  it is not liable for the star ratings on its pages, Yelp has a duty as an established and successful company to ensure that information is accurate and that comments are appropriate.

Click here for the opposing view on this topic. 

Sources: ABC, Yelp (2), Harvard / Photo credit: Linny Heng/Flickr

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