The business owners who claimed in a 2010 lawsuit that customer-review site Yelp.com tried to extort them to buy advertising haven't given up.
Last Thursday, the 9th Court of Appeals heard an appeal to the 2010 lawsuit in which several business owners claimed Yelp sales representatives had tried to manipulate them by offering to bury bad reviews and promote good ones if they bought ads from the site. Tracy Chan, a San Francisco dentist and one of the plaintiffs, claimed that Yelp took down nine of her five-star customer reviews after she declined to buy an ad on the site.
The original plaintiff is a Long Beach, Calif., veterinarian who said that he asked Yelp to remove a review that violated the site’s policy. According to the complaint, the ad was first removed, but then reappeared on the site. A Yelp sales representative allegedly told the veterinarian that he could pay to have the site take down negative reviews, according to a Wall Street Journal article.
The case was initially dismissed in 2011 by a U.S. District Court judge in Northern California who ruled that the Communications Decency Act protected Yelp by saying that Web sites are not liable for content produced by users. However, in their appeal, the plaintiffs say that the law does not protect companies who manipulate user reviews for profit—as they allege Yelp did.
"At the point and time that [the merchants] refused to continue to pay for advertising the good reviews were stripped," said attorney Larry Murray, who represents the business owners, according to Entrepreneur.com. "There seems to be a one-to-one correlation between money and having a good rating and it has nothing to do with the truth."
Yelp has continually denied any wrongdoing and said the lawsuit stemmed from misunderstanding over how the Yelp’s review filters work—which continue to anger business owners. Earlier this year, the Federal Trade Commission released more than 700 complaints against Yelp that support the claim that the company approaches business owners with bad reviews and encourages them to buy advertising.
The appeal is expected to be decided later this week. The three judges at last week’s hearing agreed that they felt the original lawsuit was dismissed too quickly, according to MediaPost.com. One judge said he was uncomfortable making a judgment without having more specifics about how Yelp operates and manages reviews. “The facts are a moving target here, and the facts matter,” he said.
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