New York Post

Yelp not to blame


Yelp 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.

US 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 usergenera­ted content for its Web site is not foolproof.

The judge also found no showing of an intent to defraud, including over sales by Chief Executive Jeremy Stoppelman and other insiders of tens of millions of dollars in Yelp stock at allegedly inflated prices.

Yelp lets users rate restaurant­s and other businesses on a fivestar scale. Positive reviews can aid sales and negative reviews can harm sales, especially if viewers perceive the reviews as unbiased.

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 said only 11 of the complaints accused Yelp of offering to manipulate reviews in exchange for fees, a small number “especially when compared to the tens of millions of reviews hosted by Yelp.”

He also said Yelp’s use of “community managers, scouts and ambassador­s” to supplement its automated screening “does not indicate that Yelp’s directors and officers knew that any significan­t number of reviews were not authentic.”

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