How much would you pay for a 5-star rating on Yelp? How about to make those bad reviews go away? So far, Yelp hasn’t officially offered anything of the sort—but a court decision earlier this month says they can if they want to.
Yelp was taken to court in California on allegations that it was “extorting” business owners by pressuring them to pay for good ratings. Yelp denies the allegation, but apparently it needn’t worry: the Ninth U.S. Circuit Court of Appeals says that fixing ratings is fair play.
That surprises many business owners. Yelp has become perhaps the biggest destination for consumers who want to know if a business is any good, especially restaurants and bars. The website has gained its dominance in large part because it seems entirely by-the-people, based on customer reviews and ratings. If those ratings are manipulated, it comes across as highly deceptive.
Businesses claim they have had positive reviews disappear when they refused to pay for advertising with Yelp, or that Yelp promised to hide negative reviews if they paid. That seems unsavory to many users, since the site’s main allure is its supposed objectivity.
But according to the court decision, it’s just a form of “hard bargaining.” In other words, Yelp collects the reviews and customer ratings, so they can pick and choose which ones they show—and use that as leverage. The case’s dismissal from a lower court was upheld.
What’s interesting is how this could shape Yelp’s future strategy. In the past, Yelp always insisted customer ratings are completely separate from paid advertising. But even if that was true up until now, it need not be after this court decision. Will Yelp start to openly list positive-skewed reviews as a benefit to its advertisers?
Probably not. Here’s why:
- If they’re truly determined, the plaintiffs could appeal the dismissal yet again. Yelp could still lose out at a higher court.
- Yelp has to manage its popularity with users. Fewer people might use Yelp if the site seems rigged, and fewer users means less value to advertisers.
- It’s not clear that Yelp needs to openly promise skewed reviews. According to the plaintiffs in the case, Yelp was already able to pressure businesses to buy ad space simply with off-the-record hints about changing reviews.
No matter how Yelp reacts to the verdict, it’s important for businesses to know that Yelp scores aren’t the only—or even the best—way to attract customers online. Lots of customers do check reviews before going to a business, but many don’t. Rather than pay to raise a rating on one review site, businesses will find their money better spent on content marketing, SEO or advertising on Google.
Need help with reputation management? Talk to EverSpark today.
Yelp escapes extortion lawsuit unscathed, except for its reputation http://t.co/MlqSMP6DXN
— Engadget (@engadget) September 3, 2014
— Danny Sullivan (@dannysullivan) September 3, 2014