Yelp wins fight to remain morally bankrupt

Appeals court rules review site not liable for negative reviews

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Reprehensible review site Yelp is not responsible for negative views posted on its site, a US appeals court has ruled.

The company was sued by a locksmith who claimed that Yelp posted a scathing review about a different company to his profile as a way to pressure him to take out advertising with the company.

Douglas Kimzey, of Redmond, Washington, said the one-star review, which claimed he took a long time to get to a car lockout and then overcharged the owners, had caused him to lose 95 per cent of his business.

When he was approached by Yelp to book advertising on its service – something that the company often does, complete with a quid pro quo that it will hide negative reviews in return – he grew suspicious and sued, even implying that Yelp was behind reviewer Sarah K's posted critique.

He lost the case and appealed. But the Ninth Circuit of Appeals didn't buy the argument either, pointing out in its judgment [PDF] that his allegations were "threadbare" and he provided no evidence to back up his claims. The court also decided that Yelp is not liable for negative reviews, as they are not created by the company but third parties. The decision was unanimous.

That doesn't mean that Yelp is in the clear, however. In another case going through the system, Yelp was found responsible for a libelous statement made against a law firm on its site. In that case, the appeals court in California agreed with the law firm. Yelp appealed and it will now go to the California Supreme Court.

There is a long legal history around Yelp, which has struggled to make money from its service even though it is used by millions daily. Most controversially, it realized that it was of greatest value to businesses that had received negative reviews and had then seen business drop.

As a result, it offers advertising to companies who may then find their negative reviews are relegated or discounted from the system – an approach that was supported by the Ninth Circuit of Appeals, which noted it is Yelp's own system and it can do pretty much what it wants with it (under the concept of "editorial immunity").

That approach has led to frequent suspicions that Yelp has started abusing its control of the system to bring in money. ®


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