Business Reviews, Transparency and Lawsuits

Business owners are adjusting to a new level of transparency from online reviews.

Business owners are adjusting to a new level of transparency from online reviews.

In the past, if a business provided a poor quality product or service, the community could only learn about it through limited word of mouth comments or by checking with organizations like the Better Business Bureau. Now that we have a wide range of social media sites that provide reviews of local businesses, and more people are using these sites to check on businesses, we have a better way to learn about our local businesses. There is more information available from more people in more places, and consumers everywhere benefit from this.

Yelp Lawsuits

In the last week, news articles have highlighted the first two lawsuits against people who wrote negative reviews on the popular local review site,  The first suit involved a chiropractor in San Francisco who received a negative review from a patient. This suit was settled out of court and while the details of the settlement are confidential, the negative review was replaced with a conciliatory statement. The second suit involves a dentist in Foster City, California based on a negative review from the parents of an under-age patient. This case has not been resolved at this time.


Just as people who start using social media sites must adjust to a new level of personal transparency, business owners today must adjust to having every customer become a potential online reviewer. A business owner who can’t stand to see anything less than a stellar review of her labor of love will be stabbed in the heart each time someone posts an honest opinion of a singular experience with the business. Business owners are accustomed to consumers voting with their feet and dollars inside the business. But now, business owners must adjust to a second form of voting, where consumers voice opinions within the online community on how well or how poorly a business owner is doing his job.

Reviews With Integrity

A negative business review can trigger a lawsuit. I believe that a reviewer should give a negative review of a business if that is your experience. However, before placing a negative review, a reviewer should take a few precautionary steps. Make sure your facts are correct and you are prepared to defend them. If you had a bad experience with a business, I would hope that you tried to resolve it with the owner to your satisfaction before launching an online assault through a negative review to an unaware business owner. Just like the business owner must deal with transparency issues when she reads your review, your online actions are also open to exploration through the legal system where your transparency can also cost you legal fees.

It turns out, the same law that protects a good samaritan from liability from their honest good efforts for another also protect sites like Yelp from being sued for the content of business reviews. That leaves the reviewer open to legal claims such as defamation if the business owner feels attacked by a review.

There are some people who will misuse online reviews to take revenge on a business or business owners, just as there are some business owners who will file lawsuits without any merit. That minority aside, people who publish thoughtful business reviews, whether positive or negative, do a service for the community and for the enlightened business owners who are open to thoughtful feedback.

If you want to learn more about the legalities of providing online content, the Citizen Media Law Project has a free Legal Guide.

About author:

Charlene is the information strategist behind Crow Information Design.

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