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Yelp Drives Hard Bargain, Not Extortion

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Yelp-LogoOver the years, Yelp has been repeatedly accused of manipulating how businesses appear on the site to extorts ads from them. An appeals court in California ruled on this topic last week, affirming a lower court’s earlier decision that Yelp can lower or raise the rating of a business depending on whether it advertises with the company.

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According to The New Yorker, this decision came partly because the court felt that the plaintiffs hadn’t done enough to demonstrate Yelp’s misconduct.

Yelp has denied the claims of extortion and says that it uses an automated system that collects reviews to determine ratings.

The court ruled that even if the company did practice this behavior, the practice would not constitute extortion.

“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,” wrote Judge Marsha Berzon. “As Yelp has the right to charge for legitimate advertising services, the threat of economic harm that Yelp leveraged is, at most, hard bargaining.”

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Berzon did note that the plaintiffs could pursue other claims involving Yelp, but the extortion allegation did not hold up.

In a blog post on its website, Yelp said that it has never changed business ratings for money.

“We are obviously happy that the court reached the right result, and saw through these thin attempts by a few businesses and their lawyers to disparage Yelp and draw attention away from their own occasional negative review,” said the company.

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