How much trust do you put in online reviews of local businesses? A lot of people use them as a decision-making tool before spending their hard-earned money on a good or service. Quite often and understandably, small business owners with a poor review or rating want to sue the messenger.
Recently, Yelp! was sued for manipulating some small businesses’ online ratings after the companies would not buy, or quit, advertising on Yelp!’s website. Continuing to deny what restaurateurs have said was true for years, Yelp! says it does not rearrange positive and negative reviews so they are higher or lower on a review list. At times in can seem the reviews are posted without any discernible reason other than to impact consumers’ perceptions.
However, Yelp! got another positive review from a federal court last week and this one is at the top of the list. The Ninth Circuit Court of Appeals, ruled in Yelp!’s favor and confirmed the business owners that brought the suit did not sufficiently allege they suffered from “economic extortion.” The allegations included that the businesses’ ranking’s had plunged following negative encounters with Yelp! staff or sales reps usually over ad sales. The Court explained:
The business owners may deem the posting or order of user reviews as a threat of economic harm, but it is not unlawful for Yelp to post and sequence the reviews. As Yelp has the right to charge for legitimate advertising services, the threat of economic harm that Yelp leveraged is, at most, hard bargaining.
Did you catch that? Yelp! may legally post the reviews it wants to, and not the ones it does not, and in any order it wants. That means Yelp! has the right to not post particular reviews (good or bad), can bury a bad review or raise an older, positive review from the obscure second or unseen third page to the most prominent top spot on page one.
The blindly trusted, and unreliable, user reviews we dutifully turn to and place so much credence in before making a purchasing decision may lawfully be manipulated by the companies that own them. Worse yet, the purely portrayed common man’s opinion may be dishonestly altered in order to deceive consumers to make a profit.
The other conduct Yelp! was accused of was writing negative reviews itself. The Court didn’t find it plausible and found dismissal of the claim proper. Although Yelp! has admitted it used to pay folks to write reviews during its infancy, the Court determined the factual allegations were insufficient to allow the case to continue.
In 2007, the CEO for Yelp! even wrote in a blog post (where else?) for The New York Times “there was a time in our earlier days where we experimented with paying for reviews directly in cities outside of San Francisco to help get the ball rolling in our otherwise empty site.” Yet, pleading this fact coupled with some rather weak allegations did not suffice.
But the Court does offer an assurance to small business owners everywhere when it concludes the opening the Court’s written opinion by hinting there may be a way to attack Yelp!’s alleged conduct:
We emphasize that we are not holding that no cause of action exists that would cover conduct such as that alleged, if adequately pled. But for all the reasons noted, extortion is an exceedingly narrow concept as applied to fundamentally economic behavior. The business owners have not alleged a legal theory or plausible facts to support the theories they do argue.
The hint is nice. Kinda like “Come on lawyers, the answer is right there! Just use it!”
Don’t worry Yelp!. I won’t say what claim to use either . . .
The Terrible Yelp Ruling Isn’t So Bad–The New Yorker
Court rules for Yelp in suit over online ratings – SFGate.