There’s always been talk among business owners of the “grey-area” around Yelp purposely placing negative reviews on non-paying merchant profiles. Unfortunately this did actually happen, and some business owners did actually sue Yelp – and in the end the court ruled that Yelp is completely in the clear in doing this.
The ruling supported a lower court decision that dismissed the lawsuit filed by businesses that said positive reviews disappeared from their Yelp page, which dropped their overall star rating; or a negative review reappeared or was moved to the top of the review after they declined to purchase advertising from Yelp.
One of the businesses, Santa Barbara-based Cats and Dogs animal hospital, claimed a Yelp representative said the company would hide negative reviews or place them lower on the page in exchange for advertising.
Judge Marsha Berzon stated that Yelp’s business model is to charge for advertising space and as such it has the right to charge for legitimate advertising services, with the threat if pushing up negative reviews being seen as merely hard bargaining.
Unfortuntately this has a huge negative side to small business owners. See you don’t really get a choice of being on Yelp or not. Your business is located automatically using public records available online. Combine that with the fact that Yelp just won this lawsuit, making the argument now case law allowing it to be used as a defense in the future for similar accusations.