Yelp prevails in lawsuit over authenticity of its reviews
Business
Yelp prevails in lawsuit over authenticity of its reviews
Yelp Inc won the dismissal of a lawsuit by shareholders who claimed they were fraudulently misled about the authenticity and quality of its reviews, and whether Yelp manipulated those reviews to favor paying advertisers. U.S. District Judge Jon Tigar in San Francisco said reasonable investors would understand that not all Yelp reviews are real, particularly given the company’s admission that its technology to screen user-generated content for its website is not foolproof.
[Yelp’s use of] community managers, scouts, and ambassadors does not indicate that Yelp’s directors and officers knew that any significant number of reviews were not authentic…
Nov. 24 decision, U.S. District Judge Jon Tigar
Shareholders led by Joseph Curry accused Yelp of inflating its share price by falsely touting the reliability of its reviews, as part of a calculated strategy to extort businesses into buying ads or making payments in exchange for removing bad or fake reviews, but the judge found no showing of an intent.
