Yelp vs. Small Businesses: What You Need to Know

By Brooke Tajer on
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 The U.S. 9th Circuit of Appeals in San Francisco ruled in Yelp’s favor in the long dispute between Yelp and various businesses.

After countless accusations of extortion – like Yelp supposedly removing positive reviews to pressure companies to pay for advertising – the court ruled that it was not unlawful for the site to post and sequence its reviews. As for the notion that Yelp blackmailed its users into paying by threatening to post bad reviews, the court stated that the site has the right to charge for advertising services, and that the leverage it used was just hard bargaining. It was decided that the plaintiffs – in this case the businesses – failed to have established rights beforehand to positive reviews and failed in proving the creation of negative ones.

As their chances of winning in the long run are growing slim, the small businesses involved are considering every option they may have, including an appeal. John Mercurio asserted that, due to the large amount of businesses affected and frustrated by the situation, he cannot and will not back down.

Mercurio, who owns an auto repair shop in California, remains true to his statement that Yelp removed fourteen of his five-star ratings when he refused a sales suggestion to spend $500 a month on Yelp advertising. Mercurio disclosed that a one-star rating somehow positioned itself at the top of his Yelp listing, and that his business sales have since dropped thirty percent. "I can't believe they got away with it," he said of the latest ruling. "It's mafia of the Internet. You're basically a hostage: pay up or die."

John Mercurio is not the only infuriated business owner to experience the supposed bullying from Yelp. James Demetriades, owner of the Landing Resort and Spa in Lake Tahoe, claims Yelp was filtering out legitimate reviews and putting its elite users’ reviews at the top. Demetriades went on to explain that though he understands that some businesses will receive some bad reviews, he realized especially strange filtering practices on his Yelp reviews. He, like countless others, simply wants justice put back into the review system.

However, unless the businesses are able to produce specific evidence of Yelp’s alleged alteration of ratings, it is unlikely that they will come out on top. Yelp still maintains an average of 138 million visitors to its site each month, and the revenue expected for this year alone is as much as $375 million.