San Francisco, California–Yelp has won a pay-for-play court ruling from the United States 9th Circuit Court of Appeals. The decision comes after Cats and Dogs, at Santa Barbara-based animal hospital, sued the social review site over allegations one of its representatives offered to sell the veterinarian clinic ad space, with a promise of lowering or hiding bad reviews.
The animal hospital declined to pay for ad space and thereafter, negative reviews began to (re)appear on the veterinarian facility’s Yelp profile. The small business filed a lawsuit against the review site, but to no avail.
“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. As Yelp has the right to charge for legitimate advertising services, the threat of economic harm that Yelp leveraged is, at most, hard bargaining,” Judge Marsha Berzon wrote for the three-judge panel.
Yelp Pay-for-Play Legal for Now
The animal care business isn’t the only company with concerns about the review site’s practices. The owner of Wheel Techniques, a Santa Clara auto body shop, asked Yelp why a competitor ranked higher and was told that said competitor bought ads, according to a news report by the San Francisco Chronicle. The decision upholds another ruling by a lower court in which business owners sought to bring a class action lawsuit for alleged payola or extortion.
This appears to be at-odds with the review site’s own assertions it does not bias ranking placement and conspicuous negative reviews based on a pay-for-play scenario. Yelp has said that its, “…review-filtering software doesn’t distinguish between advertisers and non-advertisers.”
Yelp’s Consumer Influence
Yelp has much influence over consumers. By its own proprietary reporting, in conjunction with Nielson Research, 98 percent of consumers who view businesses found on their site choose to make a purchase based on customer reviews. For pending purchases, or those made in less than a week, Yelp leads the field. Nielson estimates 44 percent of consumers report using the review site. What’s more, by peer comparison, Yelp enjoys nearly 1.5 times more consumer influence and trustworthiness than Angie’s List.
Businesses have long complained about the review site’s practices, claiming that it does manipulate profile placement and customer reviews to force company’s to pay for ad space on the review site’s platform.