Recently the U.S. 9th Circuit Court of Appeals ruled that Yelp has the legal right to suppress positive reviews and promote negative reviews based on advertising purchases.
While some business owners have suspected that Yelp was playing games with reviews, (all of which Yelp denies), the recent court decision opens the floodgate for editorial skewing of reviews and ratings across all social media channels making rumor potentially a legal business practice.
Lawsuit and Ruling
Perceiving a pattern of abuse, Cats and Dogs Animal Hospital, based in Santa Barbara, Calif, and other plaintiffs sued Yelp July 11, 2013. In her opinion on the matter, Judge Marsha Berzon of U.S. 9th Circuit Court of Appeals wrote that Yelp has the right to charge for legitimate advertising services, and that the threat of pushing negative reviews up is little more than hard bargaining.
“Yelp’s ratings, based on reviews by members of the public, are within its discretion, a ‘benefit’ the company chooses to provide. Because the company’s ads also have value, any implicit threat by Yelp to remove positive reviews absent payment for advertising was not (legally) wrongful.”
Berzon further stated that “it is not unlawful for Yelp to post and sequence reviews,” adding that plaintiffs are still free to contend harm. The court believes that Yelp is not engaging in any practice that would cause permanent economic harm, and that the owners of these businesses failed to provide sufficient evidence that tampering had occurred.
Obviously, Yelp is pleased with this ruling. Yelp’s litigation director, Aaron Schur, commented 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 ax to grind.”
On most social media sites, business listings are a matter of having the information pulled from a database and posted to the site. In many cases businesses don’t even realize the power of listings or reviews to influence their ability to rank in search listings that are actively influencing the decisions of potential clients and customers.
While most sites offering reviews have instruments in place to respond to negative reviews the reality is that the current ruling gives them a free hand to game their own system and reap the monetary rewards through “hard bargaining.”
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