YELP?? Should you trust the ratings?

Seems everywhere you turn you hear about checking out a businesses ratings before going there. It is almost a religion with the Millennials. And they base many of their decisions on it. When you’re a business owner this is could mean life or death as our way of consuming and commerce evolves.

A couple of weeks ago there was a ruling from the Ninth U.S. Circuit Court of Appeals in San Francisco,  about a lawsuit against YELP. The lawsuit was based on the facts and testimony of business owners that YELP would remove good ratings if they didn’t use the “Paid Advertising” to share their businesses with YELP viewers. To simplify what happened. If the businesses on YELP wanted to keep their good ratings they would need to pay for it. Even though the good ratings were organically created through the YELP viewers giving the business a good review and rating. If they didn’t pay YELP what they wanted (the business to advertise on YELP), the rating may be removed. Does exhortation come to mind. Great business model…as long as everyone goes along with it.


WELL, not to the judge. “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, Judge Marsha Berzon said in Tuesday’s 3-0 ruling.

The court upheld a federal judge’s dismissal of a proposed class-action damage suit by small-business owners who claimed Yelp’s sales representatives told them their ratings would depend on their decision to buy ads.

So next time you see the ratings of a business, be clear and  know that they may not be accurate because they didn’t succumb to, what many may feel is, extortion of the sales staff…. and the proof is right here in this story. Continue below to read the testimony of some that have apparently been face to face with the New Extortion of the Modern Day. For the rest of the story, continue with the story below.

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“I’ve got hundreds of people who have called me with this problem: When they stopped advertising with Yelp, their good reviews got stripped out,” the business owners’ lawyer,Lawrence Murray, said after Tuesday’s ruling.

“What does it take, to have a gun to their head? … This is extortion in any other setting.”

Yelp said it’s not true and couldn’t happen, because its review-filtering software doesn’t distinguish between advertisers and non-advertisers.

“For years, fringe commentators have accused Yelp of altering business ratings for money,” said the San Francisco company’s litigation director, Aaron Schur. “Yelp has never done this, and individuals making such claims are either misinformed or, more typically, have an ax to grind.”

One plaintiff, Boris Levitt, owner of a furniture-restoration business in San Francisco, said several five-star ratings disappeared from his Yelp page two days after he refused to buy ads. Tracy Chan, a San Francisco dentist, said a Yelp sales representative offered her “lots of benefits” for advertising, then removed nine five-star ratings from her page a few days later – ratings that were restored after she signed an advertising contract.

Cats and Dogs Animal Hospital of Santa Barbara said Yelp offered to “hide negative reviews” in exchange for ad sales. The owner of Wheel Techniques, a Santa Clara auto body shop, said he asked Yelp why a competitor had a higher rating and was told that the rival company bought ads.

Such claims, if credible, might tarnish Yelp’s own ratings with the public. Like the businesses its users rate, Yelp must work hard to maintain its own credibility with consumers, said Gartner Research Director Brian Blau.

“On the surface, you’d think this news would be an endorsement for Yelp,” Blau said Wednesday. But it could leave consumers wondering, “If Yelp is permitted to do this, will they? They said they aren’t, but will they in the future? That’s going to be the bigger question.”

In this case, the appeals court said the plaintiffs failed to show that the company violated their rights or broke any laws, even if they proved all their allegations.

Yelp’s ratings, based on reviews by members of the public, are within its discretion, Berzon said – a “benefit” the company chooses to provide. Because the company’s ads also have value, she said, “any implicit threat by Yelp to remove positive reviews absent payment for advertising was not (legally) wrongful.”