Yelp shareholders can’t continue pursuing a lawsuit against the website, a federal judge has ruled, resolving claims concerning the authenticity of the rants and raves of online reviewers.
U.S. District Judge Jon S. Tigar dismissed a suit on Friday that had been brought by shareholders who said Yelp had been manipulating reviews of businesses in order to increase ad revenue and the company’s worth.
The shareholders had claimed they were misled by Yelp, a popular review site, based on allegations that hosted content “included a substantial amount of false reviews by reviewers who did not have first-hand experience with the businesses,” the complaint reads in part.
Ruling for the Northern District of California on Friday, however, Judge Tigar said that Yelp’s own statements with regards to the website’s success “were not false or misleading because a reasonable investor would not believe that all reviews hosted on Yelp’s website were authentic.”
“Defendants both explicitly and implicitly acknowledged that some Yelp reviews were inauthentic,” the judge ruled. “Those acknowledgements, along with a common-sense understanding of what it means for a website to host user-generated content, demonstrates that no reasonable investor could have understood defendants’ statements to mean that all Yelp reviews were authentic.”
“Yelp has said from the beginning that this lawsuit–like others asserting similar theories–was without merit, and once again the court has agreed with us,” a spokesman for the company said in response to the ruling. “Yelp has repeatedly stated that it does not manipulate reviews in favor of advertisers or against non-advertisers, and the court saw through plaintiffs’ attempts to cast these statements as false.”
The would-be plaintiffs had previously attempted to have their suit elevated to class-action status, but Judge Tigar rejected their efforts back in April.
• Andrew Blake can be reached at ablake@washingtontimes.com.
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