from the yelp-the-heck-out-of-it dept.
Signed into law yesterday by Governor Jerry Brown, California Civil Code Section 1670.8 now provides that:
A contract or proposed contract for the sale or lease of consumer goods or services may not include a provision waiving the consumer's right to make any statement regarding the seller or lessor or its employees or agents, or concerning the goods or services.
This statute comes with a fine of up to $2,500 for the first violation, up to $5,000 for the second and subsequent violations, as well as up to $10,000 for a willful, intentional, or reckless violation.
Software product EULAs are sometimes used to forbid negative reviews, and while this is not mentioned specifically in the text of the law, it is a fairly reasonable argument to think that this provision will apply there as well as in places like Yelp.com.
This law only applies in California, not in other states, or in other nations. Even so, it is a step in the right direction.
Facebook is testing a new rating and review service, and that has Yelp investors twitchy:
Facebook wants to tell you about local businesses, including ratings and reviews from your friends and others who have taken advantage of their offerings. If you're thinking, "That sounds a lot like Yelp," you're not alone.
Yelp Inc. shares dove as much as 9.2% Tuesday after Search Engine Land detailed Facebook Inc.'s new desktop Services offering, which appeared with no announcement or fanfare from the world's largest social network.
"We're in the early stages of testing a way for people to easily find more Pages for the services they're interested in," a Facebook spokesman said in an email.
The push to direct its more than 1 billion users toward local businesses is nothing new for Facebook, which launched a service called Places in 2010 with a similar aim. The difference now is the amount of data Facebook has after years of allowing users to check in and rate local businesses, a wealth of info that has been hard for other Yelp rivals to amass. "With 50M Facebook Business Pages, and a global monthly active mobile user base of $1.5B+, Facebook represents a formidable competitor for anyone in local, especially given the ~60%+ engagement of mobile daily active users," Yelp bull Darren Aftahl, of Roth Capital Partners, wrote in a note Tuesday, as reported by Barron's.
[More After the Break]