Glenn Reit is an Upper East Side dentist who recently sued Yelp.com and lost. The trouble began in May 2009, when “Michael S.” posted a negative review of Reit’s practice on its Yelp page, which until then contained about ten uniformly positive reviews. To Michael S., Reit’s office was “small,” “old,” and “smelly,” his equipment “old and dirty.” Calls for new consultations dropped markedly that month.
Yelp wasn’t cooperative when Dr. Reit called for help. Not only did it refuse to remove Michael S.’s allegedly defamatory post, but, according to Reit, it proceeded to delete all his positive reviews, in an effort to coerce him into buying advertising on the site. If Reit had paid for ads, the complaint alleges, he would have gained some control over his reviews. In March of last year, Reit brought a defamation suit against both Michael S. and Yelp, and he further claimed that Yelp violated New York’s deceptive trade practices statute. In September, however, a New York state court dismissed Reit’s claims against them, leaving Reit only the ability to pursue his defamation claim against Michael S. directly. If he chooses this route, Reit will face an uphill battle: even finding out Michael S.’s real name would require some showing of the case’s merits and perhaps a First Amendment analysis. And since Michael S.’s pockets probably aren’t quite as deep as Yelp’s, that battle may not be worth the cost.
This isn’t the first time Yelp has been accused of this sort of pay-to-play practice. In early 2009, several newspapers rounded up allegations that Yelp made sales pitches to rearrange and remove reviews in exchange for ad money. And in February of this year, Cats and Dogs Animal Hospital in Long Beach headed up a class action suit against the website under California’s somewhat amorphous unfair competition law.
Throughout all this, Yelp has denied any shady dealings. It has insisted that the only review-related benefit that advertisers received was the ability to select one “Favorite Review” that Yelp bumped to the top of the business’s page, with a notice that the business had specially selected it for viewing. To explain the observed shifts in review presence and order, Yelp has pointed to its automated “review filter,” which blocks reviews from less “established” users until they become more established. If a user becomes more established, her reviews will suddenly appear; if she becomes less established, they might disappear. Yelp credits much of its success to the filter, which it says prevents the dual plague of false positive reviews from business owners and false negative reviews from their competitors.
Last April, however, Yelp made two changes to its policies: it eliminated the “Favorite Review” benefit for advertisers, and it enabled users to click through to reviews that have been filtered out of a business’s page. These modifications were no confession, framed instead as ways to “reinforce that trust” that underlies Yelp’s success.
The deceptive-trade-practices prong of Dr. Reit’s case was based on alleged discrepancies between Yelp’s claims in its Business Owner’s Guide that its review sorting is “entirely automated to avoid human bias” and the reality Reit painted in his complaint. The court was swift in its disposal of this charge. Under New York common law, to qualify as a “deceptive practice,” business conduct must first be “consumer-oriented” and “materially misleading to a reasonable consumer.” Since Yelp’s allegedly deceptive conduct was directed toward other businesses, and not to consumers per se, Dr. Reit’s claim did not meet these threshold requirements and thus had to be dismissed. Because the plaintiff apparently didn’t raise the issue, the court did not address the idea that businesses are in fact the only possible “consumers” of Yelp’s advertising service, or the possibility that Yelp also makes user-directed claims of being entirely uninfluenced by “human bias.”