Yelp Now Has Court Permission to Manipulate Ratings for Money
Do you remember all of those recent and not-so-recent accusations that the popular business listing website, Yelp, manipulates its ratings for money? Well, the accusations might not be that far from the truth. For years, a number of business owners have been claiming that Yelp uses the promise of good ratings, as well as the threat of bad ratings, to sell advertising space. Basically, if a small business decides to buy a big chunk of advertising space from Yelp, they're more likely to get a five star review. Likewise, a business that decides not to buy advertising space will probably be stuck with a much shittier rating.
That taco place around the corner that didn't buy ad space? Yea, it might not be there for too much longer.
As you may have gathered, this alleged practice not only pisses off small businesses, but it causes them pretty significant difficulty in a business environment that's becoming more and more tech driven. Because of this, a group of business owners decided to band together and do something about it by proposing a class-action damage suit against the company.
The proposal was dismissed in a 3-0 decision last Tuesday.
On September 2nd, the Ninth U.S. Circuit Court of Appeals in San Francisco ruled that the practice - while not yet proven to be in use by the company - would not be breaking any laws. According to federal appeals court Judge Marsha Berzon, "as Yelp has the right to charge for legitimate advertising services, the (alleged) threat of economic harm ... is, at most, hard bargaining," and not extortion or unfair business practices.
That's pretty heavy. That means that, while Yelp spokespeople continue to claim that their review selection process is automated and doesn't judge based on ad-buyer status, they would be well within their rights if they were to decide to start. And, considering how often small businesses rely on favorable reviews, Yelp would essentially be forcing these business owners to buy advertising space lest they find themselves in a less-than-ideal situation.