Category: Author: David Hall
It happened again—another report about Yelp trying to “extort” a business to advertise, threatening to harm its rankings on Yelp if they didn’t “play ball.” One of our clients on the east coast said that when they told Yelp that they were canceling their advertising, the advertising rep threatened that they would have a hard time showing up in Yelp again. This client hates Yelp, though we cautioned them that Yelp is very strong and they should continue to try to cultivate Yelp reviews.
There have been a number of reports of this type of activity, and we have heard, in particular, claims that Yelp would remove negative reviews for advertisers, or at least push them further down the page, and make negative reviews more prominent if they cancelled advertising. There are too many of these claims to believe that they have no foundation at all.
Yelp, on their website, adamantly denies that any such thing is going on. They state, “There’s no amount of money a business can pay to manipulate their reviews or rating and Yelp doesn’t skew things in favor of advertisers or against businesses that don’t.” To document their assertion, they cite media reports of court cases. However, if you delve into those cases and look at sources reporting those cases other than the ones Yelp refers to, you get a different understanding of what the courts are saying.
Here’s the history of the principal case that everyone cites, Levitt v Yelp. The case was brought in 2011, and it was initially thrown out by the court. Yelp likes to cite this as strong evidence for its position, but even this doesn’t really validate what they are saying, because this court never even heard the evidence. But then the case was reinstated on appeal, and the final decision was issued in September 2014 by a three-judge panel of the 9th US Circuit. And what the court said in that decision is most interesting. It did not weigh in on the issue of whether or not Yelp was skewing things in its ratings. What it said was that Yelp had every right to do just that, if it wanted. Such tactics, the judges said, were not extortion as the plaintiffs claimed but merely hard bargaining tactics. You can read the report of this decision in Business Insider.
So is Yelp actually manipulating ratings? I don’t believe they are guilty of everything that businesses claim. But I do believe that they are taking the latitude the court has given them as far as they think they can. My advice, for businesses that feel they have been abused by Yelp, is to forget any claims of extortion. Yelp apparently, as a private business, has the legal right to withhold its graces from people who don’t pay them money. But I do not believe that they have the right to make false claims. They cannot manipulate reviews and then claim publicly that they are not–that is false advertising, and that type of claim could maybe get somewhere. One of the judges in the aforementioned case hinted at that option when she said that the plaintiffs could pursue other claims involving Yelp, even if the extortion claims didn’t hold up.
Oh, and I would sue them someplace other than in San Francisco (Yelp headquarters).
Meanwhile, it is smart business to play ball with Yelp on their terms. They are powerful. I would advise all of our clients to cultivate Yelp reviews and Yelp rankings and to consider advertising on Yelp.
Update – July 8, 2015 – We got another report from a client who had a couple of negative reviews on Yelp who reported that the Yelp sales rep told him that if he bought Yelp advertising, those negative reviews would go away.