Tuesday, November 01, 2011

A cry for Yelp

Levitt v. Yelp! Inc., 2011 WL 5079526 (N.D. Cal.)

If I can never achieve my aspiration to be the Yahoo! Professor of Law, now I can at least add Yelp! to my wish list. I will, however, omit the exclamation point in the rest of this summary because the court did and because it plays merry heck with my autocorrect.

Plaintiffs alleged that Yelp manipulated the content of their reviews to blackmail them into paying for ads. Eric Goldman has already covered the basics, including the complete win on §230 despite allegations of Yelp’s evil motives. I have only a couple of additional points.

First, Yelp joins the ranks of defendants attempting to resolve substantive issues by alleging lack of standing (because plaintiffs couldn’t prove they’d been harmed by Yelp’s alleged conduct). The court rightly rejected that argument as too bound up with the merits to be treated as a standing question, especially given that plaintiffs hadn’t been allowed any discovery.

Second, I disagree with Eric that potential false advertising claims should be off the table. The court specifically noted that plaintiffs didn’t allege a violation of state consumer protection law based on any claim by Yelp that it posted reviews based on bona fide neutral criteria. Both businesses and the public could be harmed if people rely on the purported neutrality of Yelp’s service and in fact Yelp is manipulating ratings to encourage ad buys without disclosing this practice. Claims based on Yelp’s representations about its own conduct wouldn’t be immune under §230. But plaintiffs simply didn’t allege that as a cause of action. Eric worries that plaintiffs will scour defendants’ marketing materials for statements about their policies, but false advertising law has more than enough tools for screening out claims based only on occasional and fragmentary representations.

1 comment:

Theresa said...

Businesses should sue for other reasons. For example, forcing a business to be on Yelp and refusing to take the business off Yelp could be a future lawsuit under unfair business practices. No business should be forced to be on a businesses website without that business permission.