Judge Throws Out Lawsuit Alleging Yelp Extorted Businesses

Yelp

Allegations that Yelp disfavors businesses who don’t advertise with it have been dogging the company for years. Two years ago, the S.F.-bay area alt-weekly East Bay Express ran a cover story called “Yelp And The Business Of Extortion 2.0,” featuring businesses that claimed they were told to pay advertising bucks to Yelp-or else. The company has strenuously denied these claims, but last year a proposed class-action lawsuit was filed against it by several businesses anyhow. Now a judge has tossed out the lawsuit, and her order reflects her deep skepticism about their claims.

Businesses complain about consumer reviews all the time. But Yelp has legal immunity from most of those claims under a section of the Communications Decency Act, which provides a strong defense to internet companies against claims based on content posted by their users. However, that isn’t going to keep Yelp safe from this lawsuit, which alleges that the company actually manipulated reviews based on whether or not a company advertised on Yelp. (It’s an early stage of the suit, and those allegations have not yet been evaluated by the judge in the case.)

Despite the fact that U.S. District Judge Marilyn Patel didn’t grant Yelp immunity on those grounds, in a recent order, she wrote that the plaintiffs’ complaints against Yelp were “entirely speculative,” and dismissed their lawsuit. However, they do have a chance to amend their complaint and add more detail, so the lawsuit isn’t dead yet.

Yelp has long filtered reviews, in an attempt to stop business owners from gaming its system. Last year, in an effort to increase transparency, Yelp changed its filtering system so that the deleted reviews are gone from the main page, but still visible if users click through to a special page that shows the filtered reviews.

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