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Yelp Has the Power to Change Restaurant Ratings

Photo: Yelp

Earlier this week, review site Yelp won one of its longest court battles when the U.S Court of Appeals affirmed the dismissal of several class action lawsuits that accused the site of altering business' rankings for payment. Now, more details about the ruling have come to light: According to the New York Times, it turns out that Yelp can legally "lower or raise the rating of a business depending on whether it advertises with the company."

A close reading of the ruling reveals the court did not find evidence of Yelp authoring or altering reviews on its site. When the court looked into whether Yelp had ever fabricated reviews, documents were scarce and so that portion of the suit was dropped. But if Yelp altered reviews in the past, or decides to alter them in the future, it would not constitute extortion.

Yelp has fought back against accusations that when business owners did not pay for advertising their positive reviews would be removed. The company also denies giving "paying clients more favorable reviews." However, according to the courts, "Yelp is entitled to set a price for its ads - and the businesses reviewed have no legal right to a high rating." While Yelp may be legally able to manipulate ratings based on its relationship with advertisers, doing so will not help to salvage the company's much-maligned reputation. Currently, Yelp is in the midst of fighting two suits: One that alleges the company deceived shareholders and sold off more than $81 million in "artificially inflated stock," and another where Yelp users believe they should be compensated for the reviews they contribute.

· Court Decides Yelp Can Change Ratings [NYT]
· Yelp Extortion Case Dismissed by Federal Court [-E-]
· All Yelp Coverage on Eater [-E-]