Yelp isn't liable for negative reviews, court rules

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Online review website Yelp can't be held responsible for negative feedback consumers post about businesses, a federal appeals court has ruled.

Yelp, through a partnership with ProPublica, added features last August that allow consumers to examine payment and ratings information about skilled nursing facilities in addition to other customers' reviews. The updated provider information includes number of beds, fines paid, payment suspensions and deficiencies.

The federal appeals court ruling stems from a libel case filed by the owner of a locksmith business who received a negative review he believed was meant for another company. The owner claimed Yelp filed the review under his business in order to get him to buy advertisements on the site.

"We fail to see how Yelp's rating system, which is based on rating inputs from third parties and which reduces this information into a single, aggregate metric is anything other than user-generated data," wrote Circuit Judge M. Margaret McKeown in the court's ruling.

Monday's ruling also affirmed a lower court's decision that dismissed the locksmith owner's argument that Yelp should be liable for releasing reviews to search engines.