Online review site Yelp recently held celebrations for its 10th anniversary. The milestone was somewhat dampened, though, by a lawsuit filed in California against the site. The lawsuit claimed that Yelp had extorted local businesses by manipulating their online reviews on the site, in hopes of extracting advertising money from them.
(One dentist in the case even claimed that she did eventually agree to pay for advertising out of fear, and that days after signing the contract, her overall Yelp rating increased to 4 stars out of 5.)
Well, it seems like Yelp has (for now) escaped all these extortion charges.
In a ruling that could affect the way business owners across the US connects with consumers on Yelp, a federal appeals court has decided that the allegations against the popular online reviews site aren’t true. In its ruling on Levitt v. Yelp, the US Court of Appeals for the Ninth Circuit affirmed the district court’s dismissal of small business owners’ allegations that Yelp attempted to extort advertising money from them by manipulating user reviews. The court said that Yelp had a right to arrange its reviews as it sees fit.
According to the court’s decision, there was really no evidence of unfair business practices conducted by Yelp. The court also dismissed the claims that the site was writing and posting negative reviews of businesses that it hoped would pay for advertising.
Said Aaron Schur, Senior Director of Litigation at Yelp, “The court noted that the facts only showed that the reviews were likely from actual customers, noting that ‘Yelp is a forum for consumers to review businesses, and huge numbers of consumers do just that.’”
“For years, fringe commentators have accused Yelp of altering business ratings for money. Yelp has never done this and individuals making such claims are either misinformed, or more typically, have an axe to grind – whether (they represent) businesses (that are) upset that Yelp will not remove reviews they don’t like, or unscrupulous Internet marketing ‘experts’ trying to make a buck off of honest business owners with dubious reputation management schemes.”
“While Yelp has always disavowed such allegations, the appeals court ruling will provide little comfort for other small business owners who believe their success depends on social media reviews” analyzed Jeff John Roberts in a GigaOM report. “The court also expresses a concern about judges interfering with the normal course of business activity, and that a stricter rule ‘would transform a wide variety of legally acceptable business dealings into extortion.’ Yelp is hardly the only online review site but the ruling may amount to a green light for all such review sites to employ what the court calls ‘hardball’ sales tactics.”
What do you think of the court’s ruling? Do you agree with it? If you’re a business owner, you can share with us your experience with dealing with Yelp in the comment section below.