Fining customers for negative Yelp reviews? Welcome to the future of big data

The one-two punch of consumers' eagerness to share their opinions and their unfamiliarity with business contacts spells opportunity.

The Union Street Guest House made news this week with its purportedly tongue-in-cheek policy of fining a wedding party $500 for each negative online review left by their wedding guests. The "We were joking!" defense defuses the original story. However, it doesn't neutralize the very real prospect of businesses trying to strike back against negative reviews by hitting customers right where it hurts--the wallet.

How, you ask, is that possible? Blame--or thank--the thoroughly modern combination of big data, startups and a cashless economy.

Consider the following scenario: You're out with friends at a new-to-you restaurant. You checked in on Foursquare's new Swarm app and tweeted the check-in. The food was okay, the service was iffy. When the check comes, you opt to pay with a credit card, and there's a line of fine print on the bill saying that by paying with credit card, you are agreeing to abide by the restaurant's terms and conditions, which are available on its website. You swipe, you're on your way, and later, you leave a two-star review on Yelp.

When you get your credit card statement two weeks later, you find that the restaurant charged you an additional $500 two days later. A phone call to your credit card company informs you that the charge is billed as a "terms of service fee." That's when you visit the restaurant's website and learn that under the terms of service, if you leave a review they don't like, they can ding you $500. And how did the restaurant find you? By hiring a big-data startup to cross-reference the restaurant's credit card records against high-traffic social media networks and consumer feedback websites.

Terms of Disservice

This may sound far-fetched, but in a digital world that already supports a multimillion-dollar "reputation management" sector--one where firms work hard to divert or delete their clients' online footprints, and where tactics have already rendered up to 20% of Yelp reviews as planted fakes--a next step is to combine two common digital-native behaviors and use them to benefit businesses. Common behavior number one: Not reading through a business's lengthy legal terms of agreement before clicking "I agree" or completing a transaction that comes with the disclaimer "By doing this, you consent to our terms and conditions." Common behavior number two: Leaving real-world footprints, like physical locations, evening activities, and meals out, all over the Internet. People generate a lot of publicly available data, free for the grabbing. Combine that digital trail with the hastily approved consent linked to a financial transaction, and it's a recipe for an enterprising startup. After all, what is big data but an umbrella term for framing specific queries, then sifting through vast pools of disparate datasets until an answer pops up?

If someone's looking to make money off charging others for their bad opinions, they better hustle. A policy like the Union Street Guest House's may not pass legal muster in the U.S. As reported by Alison Griswold at Slate:

If a policy like the one employed by Union Street Guest House were to wind up in court, it would most likely be struck down as illegal under a doctrine of contract law known as unconscionability. "It says if there's a surprise term in the contract that is so unfairly one-sided that one can doubt that a reasonable party would have knowingly agreed to it, that the clause cannot be enforced," Scott Michelman, an attorney with Public Citizen, says. "Nobody enters into a consumer contract expecting that they're going to be paying a fine if another consumer doesn't like the business."

And there's already a precedent for reputational-management user clauses being found laughable in a court of law: In June, a federal court fined online retailer KlearGear $306,750 in compensatory and punitive damages plus lawyers' fees, after the company cited its "disparagement clause" and attempted to charge a would-be customer $3500 for a negative review.

However, there's a difference between lawyers or tech-news junkies knowing that and consumers reeling from a $500 sucker punch knowing this. Into the blissful gap of ignorance will step a startup promising to keep tabs on customers' online reviews and make them pay for smack talk. And a business desperate to control its online profile will pay.

That it, they'll pay until something, or someone, forces a legal case to make it clear throughout the land: Your privacy may be in flux, but your right as a U.S. consumer to leave your customer feedback without penalty will remain uncontested.

This story, "Fining customers for negative Yelp reviews? Welcome to the future of big data" was originally published by TechHive.

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