Aniket Kesari of Fordham has written ‘Right to Yelp Laws’ and the Reputational Sanctions Market? Here’s the abstract:
How do statutes that protect consumers’ rights to write reviews shape the reputational sanctions market? In 2016, Congress passed the Consumer Review Fairness Act (CRFA), commonly championed as the “right to Yelp” law. The law makes contract provisions that prevent honest consumer reviews unenforceable, but creates carve outs for abusive, libelous, or false/misleading reviews. However, a number of states have similar laws that do not provide such a carve out. These laws arguably create an important avenue for consumers to impose reputational sanctions on bad businesses, possibly as a substitute for legal sanctions. However, bad faith consumers and competitors can also impose costs on businesses by posting dishonest, troll, or unfair reviews. This Article explores how the CRFA and similar state laws affect this reputational sanctions market. Using a difference-in-differences design, I show that the Illinois law that provides no carveouts caused a small (30/month) increase in negative reviews, and a small (1.5/month) decrease in troll-like reviews each month, but this result was not statistically significant. A computational textual analysis leveraging sentiment analysis and embedding regression reveals that there is no evidence that the content of the text of reviews was altered by the CRFA.
