(CN) - Yelp cannot block an unfair-competition lawsuit targeting the website's claims of how well it filters out unfair reviews, a California appeals court ruled.
Yelp is a free website that offers one- to five-star reviews of local businesses. Since 2005, it has used software designed to filter out reviews from friends and competitors that would be biased for or against businesses.
James Demetriades owns three restaurants in the Mammoth Lakes area. He bought advertising for his restaurants on the Yelp website.
He sued Yelp for false advertising and unfair competition, claiming that the website's filter did not live up to its claims.
Demetriades stated that instead, the "most entertaining" reviews made it through the filter to the Yelp website, even those that were "specifically and demonstrably biased."
He claimed that Yelp failed to remove reviews containing false statements from of a user named "Travis I.," who commented on Demetriades' restaurant called "The Rafters."
The trial court granted Yelp's motion to block the lawsuit, stating that Yelp's statements about the accuracy of its reviews were in the public interest.
The court also ruled that the commercial speech exception to the anti-SLAPP lawsuit did not apply because Yelp's claims qualified as "puffery" or opinion.
However, the Los Angeles-based Second District California Court of Appeals reversed the decision in an opinion written by Justice Jeffrey W. Johnson.
He wrote that Yelp's statements like "Yelp has an automated filter that suppresses a small portion of reviews - it targets those suspicious ones you see on other sites" are not statements of opinion but of fact, meaning the trial court erred in finding in fell within the exception's parameters.
"Yelp's statements are factual because they are intended to induce consumer reliance on Yelp's reviews by making specific and detailed statements intended to induce reliance such as: the filter gives consumers the most trusted reviews, and Yelp's engineers (a word inspiring confidence) are working to provide the 'most unbiased and accurate' information available," Johnson stated.
He added that stopping Yelp from making statements about its filter would not curb the free speech of Yelp or its customers.
"Users can continue to post and read reviews; Yelp can continue to solicit advertising based upon the content of its site (user reviews and business advertising); and Yelp can continue to use its review filter," Johnson wrote.
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