Yelp's extortion charges have been dropped -- but that doesn't mean the company's innocent

By Nathaniel Mott , written on September 3, 2014

From The News Desk

A lawsuit against Yelp was dismissed by the US Court of Appeals for the Ninth Circuit on Tuesday on the grounds that its claims didn't justify charging the company with extortion. The suit was filed by a number of companies alleging that Yelp offered to make negative reviews go away -- or at least make them harder to find -- if they purchased advertising units from the site.

Yelp has already published a blog post celebrating the technical victory in which it says that it's "obviously happy that the Court reached the right result" and "saw through these thin attempts by a few businesses and their lawyers to disparage Yelp." That's right: the public company that's raised $56 million since 2004 really put those body shops and animal hospitals into their place.

Or at least that's how Yelp is choosing to view the decision. Others have pointed out, however, that the court's decision was based less on Yelp's innocence in the common sense of the word and more on the fact that these businesses never had a "right" to positive reviews in the first place. Yelp isn't necessarily innocent -- it's just not guilty in a way the appeals court cares about.

As Engadget explains in its report on the court's decision:

[The other businesses] couldn't demonstrate that they had a right to hold on to those good reviews, or that Yelp had no right to demand payment. In other words, it's still possible that Yelp was pressuring stores to buy ads at the risk of losing positive buzz; it's just that no one was entitled to that buzz in the first place.
That leaves two possibilities: either Yelp really did ask these businesses for cash in exchange for having their negative reviews disappear and the company is getting off on a technicality, or it's really not as bad as everyone seems to think it is and the justice system is working as it should.

A BuzzFeed report published in 2013 suggests that it's the latter. The report seeks to answer a simple question -- "Is Yelp a bully or just misunderstood?" -- and explains the establishment of Yelp as a Mafia-like reviews site that used its size to beat on the little guys. As the report states,

A study from last year found that a measly half-star difference made it 19% more likely that a San Francisco restaurant would be busy at peak times. The converse is also true: Bad Yelp ratings can be fatal. Businesses have no choice but to be listed on the site; they have no control in what’s said about them, nor how results are ordered or filtered. With that lack of control comes anger. And with anger comes misinformation.
The report eventually concludes that Yelp has become a victim of its own size. It doesn't need to do anything to be seen as a bad company; it just has to allow people to write the reviews they want to write, and when a business owner sees and disagrees with them, Yelp takes the blame. Despite the popular "techies are evil" meme, it seems likely that Yelp really is misunderstood.