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Lawsuit Accusing Yelp of “Implied Extortion” Dismissed

March 29th, 2011 03:32 admin Leave a comment Go to comments


A judge has thrown out a lawsuit accusing local business review site Yelp of extortion. The lawsuit made a number of allegations against Yelp, accusing it of acting in a way that added up to “implied extortion,” wherein businesses were said to be treated differently on the site according to whether or not they advertised with Yelp.

Today, a judge dismissed the lawsuit on a number of grounds, including that some allegations were “entirely speculative.”

According to Eric Goldman, a professor of law at Santa Clara University, the case isn’t quite over yet, as the plaintiffs can amend their complaint, but the intro to the dismissal seems to be clear in its idea.

U.S. District Judge Marilyn Patel’s dismissed the case, writing “this case is nothing more than an improper attempt to stifle consumer opinions about Plaintiff’s businesses and defeat the broad immunity afforded to online services like Yelp’s that provide a forum for protected consumer speech.”

Goldman says that Judge Patel breaks down the complaint into four groups – that Yelp removed positive reviews after the plaintiff declined to purchase ads, that Yelp kept reviews in violation of its TOS, manufactured its own negative reviews and that it told the plaintiff that paying for ads would improve its rating on the site.

The judge decided that several of these complains were “entirely speculative.” On the second allegation – that Yelp maintained negative reviews in spite of its TOS – Judge Patel writes that “Yelp cannot be held liable on a theory that it extorted plaintiffs by refusing to de-publish negative business reviews.”

If the plaintiff can add more details to convince the judge that their complaints have merit, however, the case could feasibly move on from there.

Source: Lawsuit Accusing Yelp of “Implied Extortion” Dismissed

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