Court rules for Yelp in suit over online ratings

SAN FRANCISCO -- Small businesses suing Yelp didn't get the kind of review they were hoping for from a federal appeals court.

The businesses alleged the San Francisco company manipulated their ratings on Yelp to extort them to buy ads.

Yelp denies advertisers get more favorable treatment on its popular review service. It says its software that filters reviews to determine ratings does not distinguish between those who advertise and those who don't.

The 9th U.S. Circuit Court of Appeals in San Francisco ruled this week that it doesn't matter anyway. The plaintiffs did not prove that Yelp broke any laws. Even if Yelp does manipulate reviews, it does not constitute extortion.

"As Yelp has the right to charge for legitimate advertising services, the (alleged) threat of economic harm that Yelp leveraged is, at most, hard bargaining," Judge Marsha Berzon wrote for the three-judge panel in Tuesday's ruling.

Berzon said the plaintiffs could pursue other claims against Yelp.

The appeals court upheld a federal judge's dismissal of the proposed class action brought by the small business owners. They claimed Yelp sales representatives told them their ratings on the service hinged on buying advertising.

The business owners said positive reviews disappeared from their Yelp page and their overall rating fell or a negative review reappeared on the page after they declined to buy ads from Yelp.

Yelp said in a blog post that it does not change business ratings to get more advertising.

"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," the company wrote.

Associated Press contributed to this report.


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