September 7, 2014, - 8:57 pm

Federal Court Decision Makes Yelp Completely Untrustworthy & Here’s Why

By Debbie Schlussel

If you’ve ever trusted ratings on Yelp, here’s why you shouldn’t: some federal judges ruled that the online rating site is allowed to manipulate and lower the ratings of businesses that don’t pay Yelp to advertise on the site.

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Late Senator Daniel Patrick Moynihan once said that while you are entitled to your opinion, you are not entitled to your facts. But, now, Yelp has gotten a federal appeals court judge to allow Yelp to lie about opinion, and, therefore, create its own facts. The Federal Court of Appeals for the Ninth Circuit in San Franciso says Yelp is allowed to lower and manipulate ratings of businesses that don’t advertise on Yelp. The Appeals Court judges said that no laws are broken if Yelp lowers and/or manipulates the ratings of non-advertising businesses. I guess the judges never heard of “truth in advertising” laws, laws against fraud, and consumer protection laws–all of which are broken if Yelp is doing this.

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, the court ruled. Even if Yelp does manipulate reviews, it does not constitute extortion, it said. “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. . . .

“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,” Yelp wrote in a blog post.

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.

If Yelp truly doesn’t manipulate ratings based on advertising with the company, then why did it make the argument which the judges adopted: that even if it does change the ratings, no laws are being broken?

Maybe because that’s what actually IS happening on Yelp. From my own experience that’s been the case. I’ve posted positive reviews on Yelp for a very few businesses that I patronize and which provide very good service. Every single one of my reviews has been “filtered” out and not counted into the ratings of the businesses, while all of the negative reviews remain in view and counted toward the overall low ratings the businesses have. “Coincidentally,” none of these businesses advertises on Yelp.

See the correlation here?

Now that Appeals Court Judges in San Francisco came out of the closet and said cheating this way is okay for Yelp, the extortion and manipulation will continue. I, for one, will never take Yelp seriously. I will always wonder how many positive ratings and comments were filtered out because the business doesn’t pay Yelp to advertise. And how many negative ratings and comments were filtered out because the business does advertise on Yelp. I won’t put any faith in Yelp ratings.

And neither should you.

By the way, if federal judges had to run for re-election and they were rated on Yelp, I guarantee this ruling would have been completely different.

Sadly, they have the job for life and, therefore, don’t have to care what you think of them.

So, Yelp has the last laugh, unless these businesses in the class action appeal the decision of the People’s Republican of the Ninth Circuit of San Francisco to the U.S. Supreme Court.

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19 Responses

In a way the decision makes sense, because ruling against Yelp could open a slippery slope.

Newspapers’ editorial policies have been influenced by advertisers for years and years. The content of college courses is influenced by donors, e.g. Arab donations. As the news indicates, the same is true of a number of think tanks.

Politicians say what the lobbyists tell them to say. Accountants say what their clients tell them to say. Same is true for most lawyers (present company excluded).

Doctors’ decisions will be influenced by Federal policy rather than medical judgment more and more.

None of this is right, but it is where we are. In a sense, a decision against Yelp could have tremendous consequences. Needless to say though, it is a bizarre decision, and highlights the corruption inherent in so many aspects of society.

Little Al on September 7, 2014 at 9:44 pm

    @Little Al–Exactly right! These are the consequences of excessive regulation, energized by good ol’ Mammon. “Doctors’ decisions WILL BE influenced by Federal policy??

    Oh dear: They have been since 1965, and the plague of Medicare.

    As to Yelp, it was always stupid, ever since it became nothing more than a sort of Facebook for self-important morons who love to see their name and rants onscreen.

    I caught onto this some years ago, when I saw a rant posted for a particular New England hotel, complaining about the excessive noise and poor service caused by a large wedding party that weekend.

    I was there that weekend, and there was no wedding!

    As to the ninth circuit…Within the cesspool that is our federal court system, the ninth is the worst of the worst.

    Prometheus on September 8, 2014 at 8:34 am

      Regarding the recommendations and opinions of doctors, consumers should always be aware that they are for sale. They always have been. The pharmaceutical industry, for example,
      makes regular “payoffs” to doctors to get them top prescribe drugs. That’s the nature of the medical industry. At one time, for example, doctors endorsed cigarettes. When it comes to what a doctor tells you, caveat emptor still applies. Here’s a video pulled from the time capsule: https://www.youtube.com/watch?v=cKMn-_aQoPk
      That’s still very different from this Yelp situation. Yelp is not purporting to give its own opinion–like a doctor or a newspaper is. It pretends (i.e., lies) that the opinions and ratings reflect the views of others. That’s a big difference.

      RA: My late dad never once jeopardized his reputation or medical license by prescribing anything for the payoffs you allege. Doctors getting free lunches or gifts from drug/pharma reps is (or rather, was) a perk of the job. Every job has perks, but apparently, docs ain’t allowed any. This hardly excuses or has any similarity to what Yelp is doing, which can drive small businesses out of business for no legit reason. DS

      Ralph Adamo on September 8, 2014 at 3:23 pm

        I’m not suggesting that all doctors can be bought or influenced. But I am indicating that nobody should blindly trust what their physicians tell them, just as Yelp should not be blindly believed either. Second, third, and more opinions may be needed in certain cases.

        There are many reasons for this, and certainly not just the influence of special interests.

        But in the area of pharmaceuticals, the business news has been loaded with cases of kickbacks from pharmaceutical companies to physicians, and it would be naïve to think that those companies are making such payments to physicians without consideration of their own profits.

        Consider these, for just a few examples:

        GlaxoSmitKline: $3 billion settlement for off-label promotion, failure to disclose safety data, kickbacks to physicians, etc.

        Pfizer: $2.3 billion settlement for off-label promotion and kickbacks.

        Abbott Labs: $1.5 billion settlement for off-label promotion and kickbacks.

        Eli Lilly: $1.4 billion for off-label promotion and kickbacks.

        To companies in the pharmaceutical industry, these are actually relatively small expenditures when compared to the money they make from their activities–and they are simply considered a cost of doing business. So there will more such fines and settlements like these in the future.

        And there’s actually nothing illegal about physicians accepting the kickbacks–as they are typically characterized as perks; though I’ve seen cases in which the pharmaceutical companies have paid a particularly influential doctor by paying his helicopter bills, office lease expenses, food and travel expenses, and more. But there’s nothing illegal about the physicians taking such “perks.”

        Ralph Adamo on September 8, 2014 at 7:38 pm

          Have to agree with Ralph here. The problem with lunches isn’t the free meal itself, problematic as that may be, especially if it is a fancy lunch.

          The problem is twofold:

          first, the feeling of obligation, especially if built up over a series of lunches

          and,

          second, and more important, the fact that you are a captive, so to speak, of the salesman, during the meal. He will usually attempt to talk with you about the products or services he is offering, however subtly. You are at the table, and you know it would be rude not to listen. They are experts at wearing down resistance, and you are just sitting there trying not to be rude. The salesman knows that a certain percentage of the doctors will buckle, accept samples, and recommend the products.

          Of course many doctors are ethical and don’t yield to the salespeople, but many do. One way to recognize one of the non-ethical ones is sit in the waiting room for a while. If you see a bunch of patients sitting there, and attractive saleswomen being ushered in immediately, you know this is a doctor to stay away from.

          Little Al on September 10, 2014 at 10:22 am

    Al, there’s a big difference between the relationship between the media’s own “opinions” and advertisers and a service like Yelp and advertisers. Yelp purports to be representing the opinions of OTHERS, not paid opinions by advertisers.

    I see no slippery slope here at all. A newspaper should be free to opine as it choses, and if it gives opinions based on payments by advertisers, that’s the nature of the business. But Yelp isn’t purporting to represent its own opinions like a newspaper is. Yelp purports to represent real reviews by actual users and ratings by those actual users. But, as Debbie’s article makes clear, Yelp’s representations are false and misleading to consumers. If Yelp made it clear–similar to what the newspapers do–that the opinions expressed on Yelp are controlled by Yelp, as are the ratings of companies, that would be a different story. Of course, nobody would care about Yelp’s opinions with those disclosures, as with the proper disclosures, consumers would understand that Yelp’s rating are for sale. I hope this thing goes to the Ninth Circuit. That Circuit has reached some consumer-friendly decisions in the past.

    Ralph Adamo on September 8, 2014 at 3:07 pm

      I erred in saying the 9th Circuit has reached consumer friendly decisions. They obviously didn’t in this case. And it’s unlikely the SCOTUS will agree to even hear the case.

      Ralph Adamo on September 8, 2014 at 3:43 pm

      Ralph, I guess you will never forgive me for pointing out the residues of liberalism that exist in your way of thinking. You seem to have dedicated yourself in the last month to responding to everything I write, whether with your own name or some sort of alias, when you wish to make more incendiary comments.

      The trouble with this immediate comment is that it reflects one-dimensional thinking. When making comparisons, there is usually more than one axis on which a comparison can be made.

      Yes, there is a difference between Yelp’s supposedly representing the opinions of others and newspaper editorials supposedly representing the independent opinion of the newspaper itself.

      But while there is a difference on this axis of comparison, there is a similarity in another axis: i.e. the expectation on the part of the reader that he is reading something objectively formulated. Using the expectation of objectivity as a basis of comparison, there is, indeed, a slope that can be descended.

      Little Al on September 10, 2014 at 10:17 am

wait until all these parasites kill their host.

nadie on September 7, 2014 at 9:49 pm

Being a professional chef & avid foodie, I’ve learned by experience how bad Yelp sucks for restaurant research. The reviews are suspect, at best, as are the ratings. I’ve eaten at places written up in Food & Wine magazine, then read crappy reviews about the place on Yelp, but other, more consistently informed reviews on Urban Spoon. In fact, all I ever used is Urban Spoon any more.

Cicero's Ghost (NB) on September 8, 2014 at 9:16 am

The courts have been corrupted for a long time. It is so obvious that I heard on a major network news cast about a case being appealed from a 3 judge panel to a full court. The newscaster actually enumerated the republicans and democrats on the panel! I thought there was only one set of laws??? (sarcasm)

unholyone on September 8, 2014 at 9:35 am

I think Yelp hasn’t been paying attention to rating services like “Angie’s List” that tried to make that business model work. That is, extort business/contractors for good ratings and potentially more business.
Unfortunatley, people found out the hard way when some of the “best rated” contractors turned out to be deadbeats and refused to deliver what they promised.
Not only that, you have to pay to be a “member” of Angie’s List so they are working both sides of the street.
Now Angie’s list is a joke and I would take a review from her with a grain of salt. Yelp is headed the same way.
Extort-vertizing is not a successful business model for long.

Vuulfie on September 8, 2014 at 12:44 pm

I haven’t used YELP in years and am glad to know they are just like every other fraud in 2014.

A few years back, I went to one of my favourite restaurants for a grilled chicken salad (I don’t eat meat anymore…) and I was lucky enough to see that the young, new hire dropped my grilled chicken on the floor and put it right back on the grill. I immediately said FORGET IT but one of the regular workers insisted that it was not the ‘floor chicken’. Yeah right!

I wrote the truth on Yelp and they took it down. I would not lie about something like that and knew they didn’t give a crap about the truth. I’m glad to say the shop is now defunct. Who wants to eat dirty floor chicken?

I hope no one trusts Yelp and it dies a natural death. Honest peeps are more rare than rocking horse crap these days…

Skunky on September 8, 2014 at 1:58 pm

It’s always the stinkin’ money!

There is NO Santa Claus on September 8, 2014 at 4:26 pm

My distrust of yelp stems from the fact they let anyone create an account for a company and place a review. A disgruntled person can surf yelp and create an account and give a negative review of business even if they aren’t the owner. The account could be bogus. They have no verification process which further reduces its creditibility. Don’t indulge or put your business on the crap site is what I promote.

MrBigBrain on September 8, 2014 at 8:54 pm

Never heard of Yelp. If they tell me their opinion matters, I’ll say bs.

Truth on September 9, 2014 at 12:45 pm

Just experienced this today. Internet search turned up several restaurants near the hotel we’re staying at. Chose a Chinese place because it had three-and-a-half stars and several favorable reviews (Yelp reviews). Sounded like a pretty safe bet but turned out to be the worst excuse for Chinese food I can remember. Let’s just say the place “sucked like a Kirby”.

CornCoLeo on September 9, 2014 at 10:34 pm

I just use Yelp for the address, phone# and directions. That’s it!

Infidel on September 12, 2014 at 6:49 pm

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