Court Rules Yelp Can Manipulate Business Ratings
This month, the Ninth U.S. Circuit Court of Appeals upheld a lower court’s ruling that dismissed a proposed class-action lawsuit against Yelp. The suit claimed the company extorts advertising dollars from businesses in exchange for good reviews, a practice the federal court said is not illegal.

Photo Credit: <a href="https://www.flickr.com/photos/57009135@N00/8246725201/">planetc1</a> via <a href="http://compfight.com">Compfight</a> <a href="https://creativecommons.org/licenses/by-sa/2.0/">cc</a>
SAN FRANCISCO — Earlier this month, the Ninth U.S. Circuit Court of Appeals upheld a lower court’s ruling that dismissed a class action lawsuit against Yelp! Inc. The lawsuit claimed the company extorts money from business owners by threatening to manipulate their business ratings if they do not buy advertising.
The federal court ruled that even if Yelp manipulates its business review ratings to sell advertising, the practice would not qualify as extortion.
“…unless a person has a pre-existing right to be free of the threatened economic harm, threatening economic harm to induce a person to pay for a legitimate service is not extortion,” the ruling read, in part. “The panel held that, given these stringent requirements, the business owners failed sufficiently to allege that Yelp wrongfully threatened economic loss by manipulating user reviews.”
Boris Levitt, the owner of a furniture restoration business; the owners of Cats and Dogs Animal Hospital, Inc.; John Mercurio, the owner of an automobile body repair shop; and Dr. Tracey Chan, a dentist; filed the suit against Yelp for violations of California’s Unfair Competition Law. The law prohibits any unlawful, unfair or fraudulent business act or practice and unfair, deceptive, untrue or misleading advertising.
Levitt claimed that two days after he declined to purchase advertising from Yelp, several five star reviews disappeared from his page. Chan alleged that a sales representative from Yelp told her that buying ads on the site offered benefits “such as the opportunity to keep Chan’s business ratings high by hiding or burying bad reviews,” according to the ruling.
The plaintiffs also claimed that “approximately 200 Yelp employees or individuals acting on behalf of Yelp” have written reviews of businesses. But the federal court found that there was insufficient evidence to support this claim.
“We conclude, first, that Yelp’s manipulation of user reviews, assuming it occurred, was not wrongful use of economic fear, and, second, that the business owners pled insufficient facts to make out a plausible claim that Yelp authored negative reviews of their businesses,” the ruling read. “Accordingly, we agree with the district court that these allegations do not support a claim for extortion.”
More Showroom

California Hybrids Reach State Record
The Golden State still leads the country in electric-vehicle registrations, but much like the rest of the U.S. its hybrid market share is up while full electrics stabilize after a dramatic first-quarter dip.
Read More →
My Mercedes in the U.S.
The German brand debuted its studio dealership concept for the first time in the states in Los Angeles, tapping Americans’ penchant for creative distinctions.
Read More →
Used Sales Hit Summer Drag
The vacation season, combined with high prices, has dented deliveries and added to inventories, though supply is still slim enough to keep listings elevated.
Read More →
California Launches EV Rebate Program
Participating automakers are matching the state's $13.5 million investment in new electric-vehicle rebates scheduled to take effect later this summer.
Read More →
OEM Poll Sees Industry Evolution
Kerrigan Advisors’ survey of automakers finds that tariffs, technology, network tightening and other factors are poised to reshape auto retail.
Read More →
The Trade-In Paradox
Retailing older cars with confidence in today’s market is a matter of establishing and following a clear process that can turn greater profit for auto dealers as they aim to meet used-unit hunger.
Read More →
Focus on Vehicle Cabins
The market for interior materials will grow in coming years as automakers look to meet consumer demand while staying competitive with changeups to sourcing and included features.
Read More →
State Follows Federal Warning on Auto Ads
The Massachusetts attorney general cautioned the state’s automotive dealers to be upfront with the consuming public about their vehicle prices or risk punishment.
Read More →
European EV Market Hits Record
Seven out of the top 10 electric vehicles sold so far in 2026 in Europe are by European brands, and automakers are seeing the power train fill up their order books.
Read More →
Used EVs Outpace New
While North American electric-vehicle sales remain down year-over-year, May sales saw a 3% increase from April’s numbers as used EVs led the market.
Read More →