Yelp Inc. has won dismissal of a class action that had accused it of securities fraud for alleged manipulation of reviews to favor businesses that advertised with Yelp and punish those that did not.
U.S.District Judge Jon Tigar tossed the class action Wednesday saying the plaintiffs’ claims failed to satisfy the requirements for a securities fraud claim. He did say the plaintiffs can try again by amending the lawsuit.
Yelp was founded in 2004 as a online platform for user reviews of local businesses.
The lawsuit accused yelp of misleading investors by making allegedly false statements about its advertising practices.
Yelp argued that it used effective algorithms and filtering software to ensure the authenticity of reviews and that it screened or removed unreliable or fake reviews of non-advertising businesses.
Case: Curry v. Yelp Inc, No. 14-cv-3547JST