"More recently we've seen comparison sites with customer ratings to supply metadata about, for example, supplier reliability: but these tread dangerously close to defamation in some cases: see for example the class action lawsuit against Yelp (alleging extortion: dismissed, but shows the shape of things to come). Price comparisons are relatively safe."
As someone intimately familiar w/3rd party seller feedback on Amazon, I can tell you that the feedback there is taken very seriously by 3rd party sellers, by customers, and by Amazon. If a seller drops below a rating threshold, they are warned, and if the poor ratings persist, they're given the kiss of death: their "Featured Merchant" status is revoked.
I've never heard any suggestion of these ratings treading "dangerously close to defamation."
IMO, online feedback / reputations are very successful at rewarding good sellers and punishing bad ones. So this paragraph is a pretty weak dismissal of customer ratings as a way of proving a value add.
I think the difference is that sellers opt in to sell through Amazon, and probably sign a contract allowing Amazon to collect and display feedback; Yelp is operating without the seller's explicit consent. So unless the rating site can lock in a huge swath of consumer demand and so demand that sellers consent to allowing feedback, the artcle's point about independent rating sites stands.
As someone intimately familiar w/3rd party seller feedback on Amazon, I can tell you that the feedback there is taken very seriously by 3rd party sellers, by customers, and by Amazon. If a seller drops below a rating threshold, they are warned, and if the poor ratings persist, they're given the kiss of death: their "Featured Merchant" status is revoked.
I've never heard any suggestion of these ratings treading "dangerously close to defamation."
IMO, online feedback / reputations are very successful at rewarding good sellers and punishing bad ones. So this paragraph is a pretty weak dismissal of customer ratings as a way of proving a value add.