US business sues Yelp user over negative review

A woman in the United States is being sued for $US750,000 after leaving a bad review on social media site Yelp, with the target company alleging the statement was inaccurate and cost it lost business.

The incident is one of a growing number of defamation cases based on social media reviews or search results. Recently, a Melbourne man won a defamation case against search engine giant Google after he said search results associated him with known criminals.

But a legal expert suggests a case similar to the current Yelp one would be less likely to occur in Australia, where defamation laws are much more stringent.

“We have our uniform defamation laws…and you have to prove the person acted maliciously, and that it actually resulted in damage like a loss in sales, or the reduction in value of your goodwill,” Middletons partner David Hope told SmartCompany.

“Now, these are not easy things to do. A lot of companies don’t want to go to the time and effort of opening up their books.”

According to the Washington Post, construction business Dietz Development claims that a review left by Jane Perez has lost them new customers. The court is taking the complaint seriously – a judge has already ordered a preliminary injunction to have the post edited.

The case highlights a growing concern among businesses that online reviews – content over which they have no control – wields a huge amount of power. That same power can be devastating when incorrect, as Dietz Development alleges.

It’s certainly not the first time this has happened. Last year a blogger was sued for $US2.5 million, with a judge saying she was not awarded the same protections as journalists.

The review in question written by Jane Perez alleges the company was responsible for sub-par workmanship. Subsequently, the Dietz Development page has been heavily moderated with only a few reviews appearing.

Although defamation laws differ from state to state in America, the case nevertheless highlights the growing importance of maintaining a social media presence and responding quickly to negative attention.

Several Australian companies have experienced such backlash, including Harvey Norman and Cotton On – both businesses have been lambasted on social media for separate controversies.

David Hope says the nature of the internet has changed how these types of cases evolve.

“I think because things can move so quickly on the internet, often the quickest way to deal with them is by putting out your own counter information and addressing inaccuracies.”