Pay-to-Yelp.pdf

The US Court of Appeals for the Ninth Circuit affirmed the district court's dismissal of a lawsuit by small business owners against Yelp! Inc, alleging that Yelp extorted or attempted to extort advertising payments by manipulating user reviews and writing negative reviews, violating California's Unfair Competition Law and civil extortion laws. The court held that the business owners failed to state a claim for extortionate business practices, as threatening economic harm to induce payment for a legitimate service is not extortion under the Hobbs Act and California law, unless the person has a pre-existing right to be free of the threatened harm. The business owners also failed to allege sufficient facts to support their claim that Yelp authored negative user reviews. Additionally, they failed to state a claim for unfair business practices and civil extortion under California law.