California’s Supreme Court has ruled that Yelp YELP, -0.10% can’t be forced to remove a negative review — but that doesn’t mean consumers should trust bad reviews.
Three of the four justices who ruled in favor of Yelp on Monday argued that the Communications Decency Act protected sites like Yelp in cases like these. Previously, a California state appeals court had ruled that Yelp needed to remove libelous reviews written by an unhappy client of a California law firm. The remaining justice who ruled in Yelp’s favor instead argued that Yelp couldn’t be held accountable because it was not a party to the law firm’s original suit.
“Litigation is never a good substitute for customer service and responsiveness, and had the law firm avoided the courtrooms and moved on, it would have saved time and money, and been able to focus more on the cases that truly matter the most — those of its clients,” Aaron Schur, deputy general counsel at Yelp, wrote in a blog post.
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Indeed, federal law protects sites like Yelp from being liable for user-created content they publish. But that doesn’t give users free license to post whatever they want. Nor does federal law require that reviews left on sites like Yelp or Amazon AMZN, +0.64% must be accurate. Here are important factors consumers need to consider when it comes to reading — and writing — online reviews.
Writing a bad review can have its consequencesWhile Yelp escaped scrutiny in this case, the woman who originally left the negative reviews did not. She was compelled to remove them and still owes the law firm monetary damages.
She’s not alone. A New York gynecologist recently sued one of her patients for $1 million over a negative review posted to multiple sites, including Zocdoc and Yelp. And a cattle farmer from Kansas was sued over a TripAdvisor review his family left for a Missouri attraction.
Review sites like Glassdoor and Yelp offer tips on how to write negative reviews in ways that avoid defamation claims and provide guidance on what to do if you get sued over a review. “I would not take the lesson that users cannot say anything they want to say,” said Joseph Reagle, a professor at Northeastern University who studies online communities and reviews.
Users who want to leave reviews should be careful that they don’t overstep and merely stick to the facts. It’s also important to document what exactly occurred that precipitated the bad review to back up any claims made online.
Don’t get distracted by the number of reviewsReading online reviews isn’t any more fool-proof than writing one. To start, the sheer number of reviews can be distracting. Research has shown that consumers gravitate toward a product with a larger number of reviews even if it isn’t a higher-quality product.
“Human beings have very bad statistical intuition,” said Phil Fernbach, an assistant professor of marketing in the Leeds School of Business. “The amount of precision you get from that sample size is not informative.”
The number of reviews a product has received is generally arbitrary, experts argue. And that’s in no small part because there are so many fake reviews these days. Merchants will go to extreme lengths to flood sites like Amazon and Yelp with fake reviews because a better average rating can translate into significantly more sales.
Instead, consumers should look at reviews for their quality, not quantity. “What you should be looking for in reviews is people giving their authentic experience,” Fernbach said. Rather than merely look at the number of stars a user gave, read about why they were unhappy. On sites like Amazon bad reviews are often focused on issues related to shipping rather than the quality of the product itself.
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Alternatively, consumers can use sites such as Fakespot and ReviewMeta.com to help weed out fake reviews. Most online review sites have their own mechanisms for weeding out the fakers, and some are less prone to fake reviews. A study commissioned by TripAdvisor TRIP, +1.14% for instance found that 93% of hotel reviews on the site were accurate.
Reviews are often misleadingResearch has shown that on many review sites, online reviews tend to be skewed with most being either highly positive or highly negative. At Yelp, for instance, 48% of the reviews on the site were are? 5-stars, and only 16% were are? 1-star, according to company data.
To some extent, this is a reflection of the impact that online reviews may have, said Carl Bialik, Yelp’s data science editor. Negative reviews may be rare because businesses that are bad enough to attract a slew of negative reviews end up going out of business, Bialek said.
Additionally, consumers may flock to products or services that garner higher reviews and then leave their own reviews. Consequently, it may be harder for companies to improve their scores online.
And a better review might just mean a higher price tagA good review isn’t a sure-fire sign of quality, though. A study co-authored by Fernbach found that consumers tended to leave more positive reviews for more expensive products when the reviews were controlled for quality. People were similarly biased in favor of better-known brands.
A study by data news website FiveThirtyEight similarly found that higher-rated restaurants on Yelp in New York were also more likely to have Michelin stars — which are more often given to pricier eateries.
For all their downsides, online reviews still serve a purpose in helping to inform consumers — but experts argued they shouldn’t be considered in isolation. “I don’t think people should ignore them completely, but they should look at other things like expert reviews and word of mouth and put less weight on the average rating,” Fernbach said.
