Yelp Can Legally Manipulate Ratings
In August, we talked about the Yelp Elite Squad and wondered if Yelp really did represent the wisdom of the squad. We're going to highlight several stories in a series this week that give us more reasons to be skeptical.
Our first story has to do with a recent California case that was recently settled. The judge essentially said that Yelp has the legal right to manipulate ratings and can coerce businesses based on those ratings. One of the judges stated "As Yelp has the right to charge for legitimate advertising services, the (alleged) threat of economic harm ... is, at most, hard bargaining."
It's hard to imagine how this ruling won't increase the type of activity that led to California's Governor Jerry Brown signing a bill that prevents businesses from contractually asking their customers not to leave a negative review.
The crux of this issue is the perception that a negative review can "kill" a business.
Yelp is still claiming that regardless of the verdict, they do not influence or filter reviews based on whether a business is paying for advertising or not. However, this rings hollow to many. To me, it rings hollow for several reasons:
- The Yelp Elite have private functions where they are treated like royalty and provided top shelf service by businesses looking for great reviews from them. I thought businesses were not supposed to solicit Yelp reviews - How can these events be anything other than that?
- Where is the wisdom of the crowd in this discussion? Is it realistic that a business get nothing but good reviews? And why does advertising on Yelp have anything to do with their individual score? I thought advertising just brought more eyeballs to your page - where are the Yelp analytics that show how many more new customers a business gets when they advertise with them?
- We've seen examples of businesses getting creamed in the press for trying to suppress reviews. That indicates a business that doesn't "get it" anyway. They don't need Yelp's help to be publicly shamed.
The irony here is that Yelp itself is likely going to suffer the same fate as the businesses that hate them - Yelp feels they are delivering a quality product that is fair to all, but they have plenty of feedback that indicates otherwise. As long as they keep ignoring that feedback, and especially if the courts are going to rule that their "pay-to-play" tactics are legal, they will never get rid of this perception.
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