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Appeals Court Clears Yelp of Extortion Claims

Posted by timothy on from the 5-stars-for-marsha-berzon dept.

jfruh writes A U.S. appeals court cleared Yelp of charges of extortion related to its interaction with several small businesses who claim Yelp demanded that they pay for advertising or face negative reviews. While Yelp says it never altered a business rating for money, the court's finding was instead based on a strict reading of the U.S. extortion law, classifying Yelp's behavior as, at most, "hard bargaining." Interestingly, the EFF supported Yelp here, arguing that "Section 230 of the Communications Decency Act (CDA) protects online service providers from liability and lawsuits over user-generated content, except in very narrow circumstances where the providers created or developed content themselves. In its amicus brief, EFF argued that mere conjecture about contributing content – like there was in this case – is not enough to allow a lawsuit to go forward."

14 of 63 comments (clear)

  1. Hey that's a nice little restaurant you have there by Anonymous Coward · · Score: 2, Funny

    Sure wouldn't want something to happen to it.... like no customers showing up again, ever!

  2. Land of the corporations by qbast · · Score: 4, Insightful

    "unless a person has a pre-existing right to be free of the threatened economic harm, threatening economic harm to induce a person to pay for a legitimate service is not extortion," appeals court judge Marsha Berzon wrote in the decision."

    So apparently nobody has pre-existing right to be free of smear campaign on Yelp.

    1. Re:Land of the corporations by sumdumass · · Score: 2

      My understanding was that yelp was paying people to post negetive reviews until they got their advertising contract.

      However, it appears the court (EFF) didn't understand that and thought all the reviewers were regular people and not agents of yelp.

      This might not be over.

    2. Re:Land of the corporations by tomhath · · Score: 2

      Of course they have that right. Don't use Yelp.

    3. Re:Land of the corporations by MobyDisk · · Score: 2

      Have you missed the extortion part?

      Nope. It's in the article right here:

      The plaintiffs lacked the factual evidence to support their claims of extortion, the appeals court said.

      So there was no extortion par, which is why Yelp won the case. Yelp was not doing what the business owners claimed Yelp was doing.

      Slashdot refusing to censor comments on my request is a bit different from Slashdot asking me to pay or they will make sure they will be lot of defamatory comments.

      I assume by "make sure there will be a lot of defamatory comments" you are implying that they (Yelp, or Slashdot in the hypothetical) is either making the defamatory comments themselves or paying someone to do so. But there was no evidence of that.

  3. Good... by fuzzyfuzzyfungus · · Score: 3, Insightful

    As much as I think Yelp are a bunch of abhuman bottom feeders who would do the world a favor if they caught fire, I am pleased by this one.

    Section 230 is a vital defense against a truly hellish legal climate on the internet, and I'd hate to see it be chipped away during a fight against an unsympathetic defendant.

  4. Yelp has gone way downhill by brunes69 · · Score: 4, Interesting

    Yelp used to be my go-to app for restaurant reviews when in another city, but I find the quality of content on it has gone WAY downhill with things being very stale. While on a recent vacation, on THREE separate occasions Yelp sent me to a store that was closed, some of them for months.

    Personally, I have switched to the Tripadvisor app, where I find the content is much more highly curated and the community is much more active.

  5. Pay for no negative reviews? by Anonymous Coward · · Score: 2, Interesting

    Who could even trust a company that has no bad reviews? I find it impossible for any establishment to be universally liked, even if the sample group is only people who would both go to that business and post on Yelp.

    Personally, the bad reviews are where I look to find out the worst parts of a product or business, and if their worst parts aren't really so bad then I'm more likely to buy.

  6. The obvious solution... by grasshoppa · · Score: 4, Informative

    I support a business who has been targeted by yelp, and it's not pleasant. I can't prove anything, but shortly after turning the abusive sales troll down, we started getting negative reviews. Look up the users making the reviews, and it seems they have a history of making negative reviews. What's more, most reviews were factually and demonstrably inaccurate. We couldn't find any of these users in our system, so we knew they weren't customers.

    Now sure, they could have been normal trolls out to do what trolls do, but it just seemed too coincidental that they started popping up after we turned down a business relationship with yelp. Meanwhile, our customers' positive reviews would often never show up on yelp due to their algorithm.

    The obvious solution to this entire headache is to dissuade family and friends from using yelp, spread the word far and wide that they are dishonest in their policies and that companies can pay for reviews. As "family IT", we have far more authority than yelp could ever hope for.

    --
    Mod me down with all of your hatred and your journey towards the dark side will be complete!
    1. Re:The obvious solution... by rgbscan · · Score: 3, Informative

      As someone with quite a bit of Yelp experience, the filter doesn't just filter out people with a single bad review, it also looks at the distribution of the sum of all the reviews on that account. Generally, over time with enough reviews, each user generally falls into a similar pattern systemwide with a pretty regular curve of rating scores distributed over the reviews. Anything deviating from that curve more than 'x' amount gets filtered (it's secret so you can't game it). It's pretty pronounced and predictable - so the sourpusses that leave nothing but bad reviews get filtered no matter how many they write. Same with the people that leave nothing but glowing reviews.

      In my personal experience, the small businesses claiming that Yelp or a competitor are targeting them with bad reviews are full of it. I just go look up their BBB score and almost always see the same types of complaints against the business there. There generally is agreement between a trip advisor rating and a yelp score as well. Sometimes its hard for people to look at their operation and realize they truly do suck. You see it all the time on those reality shows called "Kitchen Disasters" or "Save my Restaurant" with that foreign chap from Hell's Kitchen. They always think they are rock stars and have no idea why their business is failing when dude shows up.

      I have yet to come across a business with multiple well-written (a couple of paragraphs with concrete examples) bad reviews that were legitimately attacks and falsehoods made up by competitors. Granted it's possible, but in my multiple years as a yelper "elite" and with the ~500 or so reviews I've written, I haven't seen it. When people take the time to leave lengthy negative reviews, they are usually legit.

    2. Re:The obvious solution... by DRJlaw · · Score: 2

      That's different. That's open-and-shut libel, which yelp is liable for publishing.

      ...which yelp is not liable for publishing, since the very summary that you supposedly read points out that "Section 230 of the Communications Decency Act (CDA) protects online service providers from liability and lawsuits over user-generated content, except in very narrow circumstances where the providers created or developed content themselves."

      (Not a lawyer, though).

      Which explains why your conclusion is exactly the opposite of the one required by 47 U.S.C. 230. You'll note that the plaintiffs in this case claimed that Yelp authored or co-authored the reviews instead of merely publishing the reviews. That's because claiming Yelp was liable for simple selection and publishing would be so wrong that it'd likely draw a sanction by the court.

  7. Re:Hey that's a nice little restaurant you have th by careysub · · Score: 2

    Not extortion, no siree!

    The Mob is actually a benevolent society, concerned about the well being of local businesses.

    --
    Starships were meant to fly, Hands up and touch the sky - Nicky Minaj
  8. Cui bono by swb · · Score: 2

    If Yelp has salespeople it's very easy to see that the salespeople have a motivation to punish businesses that don't play ball and they can do it without involving Yelp-the-company at all, by either doing it themselves or by farming it out if they worry about it getting linked back to them.

    This seems to be one of those "plausible deniability" kind of rackets where the company has sales people who only get paid if they make sales and an official policy against doing something shady to obtain those sales, yet its well understood among the sales people that they should do X.

    It also reminds me of the way Walmart exploits hourly workers -- the store manager is held to some financial goal. The corporation has a policy against making employees work off the clock, but it's a policy enforced at the store level by store managers. All Walmart has to do is squeeze the manager with financial targets he can only reach by ripping off employees.

  9. It's yelp's "recommended reviews" by HockeyPuck · · Score: 4, Insightful

    My neighbor runs a small mom/pop type restaurant and he gets called about once a month by a yelp representative. He's got plenty of positive reviews on Yelp, but what they tell him is that if he pays yelp, they'll move the negative ones to the "not recommended reviews" list. Normally the only way to see this list is to scroll to the bottom and see a light grey link.

    How is this any different from what the mafia did with it's "Pay for protection" schemes...?