Yelp Prevails in Lawsuit Over Authenticity of Its Reviews

Advertisement
By Reuters | Updated: 28 November 2015 16:32 IST
Yelp Prevails in Lawsuit Over Authenticity of Its Reviews

Yelp Inc won the dismissal of a lawsuit by shareholders who claimed they were fraudulently misled about the authenticity and quality of its reviews, and whether Yelp manipulated those reviews to favour paying advertisers.

In a Nov. 24 decision, US District Judge Jon Tigar in San Francisco said reasonable investors would understand that not all Yelp reviews are real, particularly given the company's admission that its technology to screen user-generated content for its website is not foolproof.

The judge also found no showing of an intent to defraud, including over sales by Chief Executive Jeremy Stoppelman and other insiders of tens of millions of dollars in Yelp stock at allegedly inflated prices.

Tigar had in April dismissed an earlier version of the complaint, which sought class-action status. He said the plaintiffs cannot sue again because any amendment would be "futile."

Advertisement

Yelp lets users rate restaurants and other businesses on a five-star scale. Positive reviews can aid sales and negative reviews can harm sales, especially if viewers perceive the reviews as unbiased.

Shareholders led by Joseph Curry accused Yelp of inflating its share price by falsely touting the reliability of its reviews, as part of a calculated strategy to extort businesses into buying ads or making payments in exchange for removing bad or fake reviews.

Advertisement

Yelp's share price fell 18 percent over three days in April 2014, when the Federal Trade Commission revealed 2,046 complaints over five years against the San Francisco-based company,

But the judge said only 11 of the complaints accused Yelp of offering to manipulate reviews in exchange for fees, a small number "especially when compared to the tens of millions of reviews hosted by Yelp."

Advertisement

He also said Yelp's use of "community managers, scouts, and ambassadors" to supplement its automated screening "does not indicate that Yelp's directors and officers knew that any significant number of reviews were not authentic or firsthand, beyond what defendants represented to the public."

Shawn Williams, a lawyer for the plaintiffs, did not immediately respond on Friday to requests for comment.

A Yelp spokeswoman said the company "has repeatedly stated that it does not manipulate reviews in favour of advertisers or against non-advertisers, and the court saw through plaintiffs' attempts to cast these statements as false."

The case is Curry et al v. Yelp Inc et al, U.S. District Court, Northern District of California, No. 14-03547.

© Thomson Reuters 2015

 

For the latest tech news and reviews, follow Gadgets 360 on X, Facebook, WhatsApp, Threads and Google News. For the latest videos on gadgets and tech, subscribe to our YouTube channel. If you want to know everything about top influencers, follow our in-house Who'sThat360 on Instagram and YouTube.

Further reading: Internet, Yelp
Advertisement

Related Stories

Popular Mobile Brands
  1. Vivo X200 FE Global Launch Confirmed; Design Teased
  2. Vivo Y400 Pro 5G India Launch Date Confirmed; Design Revealed
  3. Poco F7 Launch Date, Price in India, Design and Key Features Leaked Online
  4. OnePlus Nord 5 Series, OnePlus Buds 4 to Launch in India on This Date
  5. Oppo K13x 5G India Launch Date, Price Range and Key Features Revealed
  6. Oppo Reno 14 5G Series, Watch X2 Mini, Enco Buds 3, Pad SE to Launch Globally
  7. Switch 2 Had the Biggest-Ever Launch Week for Video Game Hardware in the US
  8. Vivo T4 Lite 5G to Launch in India Soon; Battery Capacity Revealed
  9. iOS 26 Will Soon Be Able to Display Artwork from Third-Party Music Apps
  1. Bitget Partners UNICEF Unit to Expand Blockchain Training Across India, Other Countries 
  2. WhatsApp Reportedly Working on Ability to Scan Documents on Android Smartphones
  3. ElevenLabs Expands Eleven V3 Text-to-Speech Model With Support for 41 New Languages
  4. Vivo T4 Lite 5G India Launch Confirmed; Battery Capacity, Price Range Teased
  5. TikTok Pushes Deeper Into AI-Generated Video Ads With New Tools
  6. Apple Risks Fresh EU Charge Sheet Over App Store Curbs
  7. The Witcher 4 Will Target 60 FPS on Consoles, but Series S Will Be 'Extremely Challenging' Says CD Projekt Red
  8. Oppo Reno 14 5G Series Global Launch Teased Alongside Watch X2 Mini, Enco Buds 3 and Pad SE
  9. Microsoft Begins Testing AI Agents in Windows 11, Brings Option to Share Recall Snapshots in Europe
  10. watchOS 26 to Bring Control Center Customisation Options with User-Defined Toggles
Gadgets 360 is available in
Download Our Apps
Available in Hindi
© Copyright Red Pixels Ventures Limited 2025. All rights reserved.