Ninth Circuit Rejects Merchants’ Claims of Extortion, Unfair Competition by Yelp

In Levitt v. Yelp! Inc., Case No. 11-17676 (U.S. Court of Appeals, Ninth Circuit, order entered September 2, 2014), the U.S. Court of Appeals for the Ninth Circuit affirmed the district court’s dismissal of a class action lawsuit filed by business owners who alleged Yelp Inc. had extorted or attempted to extort payments for advertising by altering user reviews and writing false and defamatory reviews in violation of California’s Unfair Competition Law (“UCL”). In a ruling that arguably suggests that Yelp can manipulate its ratings for money, the court held that the business owners failed to state a claim for extortion for purposes of the UCL. It also held that the business owners failed to allege sufficient facts to support their claim that Yelp wrote disparaging reviews of their businesses.

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