Section 004, Instructor: Mark Sabat

Interesting article on Yelp bias.

Yelp has long faced accusations that it manipulates its business-review ratings to sell advertising – five stars for a big ad buy, say, and two stars for a turndown.

The verdict from a federal appeals court: There’s nothing illegal about that.

Yelp adamantly denies giving its paying clients more favorable reviews, but even if such allegations could be proved, said the Ninth U.S. Circuit Court of Appeals in San Francisco, Yelp is entitled to set a price for its ads – and the businesses reviewed have no legal right to a high rating.

“As Yelp has the right to charge for legitimate advertising services, the (alleged) threat of economic harm … is, at most, hard bargaining,” and not extortion or unfair business practices, Judge Marsha Berzon said in Tuesday’s 3-0 ruling.

The court upheld a federal judge’s dismissal of a proposed class-action damage suit by small-business owners who claimed Yelp’s sales representatives told them their ratings would depend on their decision to buy ads.”

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