Monday, September 8, 2014

Wine Spectator, Advocate can now legally sell a 90-point rating

Can Wine Spectator now openly offer higher ratings to wineries that buy advertising -- and threaten lower ones to wineries that don't?

It appears that it can. So can the Wine Advocate, Wine Enthusiast, CellarTracker, and any other site publishing ratings.

For years, some wineries have whispered that such practices might be informally happening, even though there has never been any evidence. Charging $10,000 to bump a wine from 89 to 90 points would be unethical.

However, after a horrible ruling last week by the U.S. Circuit Court of Appeals, such a practice appears to be legal.

The court ruled that Yelp can legally eliminate positive reviews from its site for businesses that don't buy advertising, which would lower their overall ratings. It can also legally move negative reviews higher.

My rating of the court and this anti-consumer ruling: 1 star. Another example of U.S. courts considering a corporation to have more rights than a person.

Four businesses created the case by suing, calling Yelp's practices "extortion."

The court ruled, "The threat of economic harm that Yelp leveraged is, at most, hard bargaining."

Yep. If I say, "You better pay us weekly protection money or we'll cut your clientele in half," that's just good-ole bidness in the U.S. of A.

I spoke to a winery executive last week who believes Wine Spectator already gives more prominent coverage in its feature articles to wineries that buy advertising. However, even though he cited some specific examples of relationships between coverage and events and advertising, he said he doesn't believe there is a relationship between wine ratings and advertising buys.

Maybe now there could be, legally. What would a 90-point rating be worth for a 200,000-case production wine? Conversely, what would avoiding a 79 rating be worth for a $75 retail wine? The court has just immensely enhanced the profit potential of ratings organizations.

But, you say, consumers won't trust these ratings. Ha. Stories about Yelp's practices have been out there for years, but the site is still influential, and the fear of a 2-star rating from it is still considerable.

For readers of ratings sites, caveat emptor.

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Robert Cartwright said...

I am not sure you are comparing apples to apples. If I understand it correctly the business is not asking for Yelp to give them a good review. The reviews are from people who have received service from the establishment. Yelp will allow the reviews to be published for all to see, good and bad.
Wineries on the other hand are asking for Wine Spectator for the review. If the review is good they can pay to have it published.
(In my mind that seems different)
Not sure why the court would side with Yelp. Most of the reviews suck, good or bad.

Matt Mauldin said...

Robert, what Yelp does (as Blake mentions) is delete a select number of business's good reviews and puts their bad reviews in a higher position on that business's profile page. They then try to sell advertising to the business under the premise of showing more of the positive consumer reviews. A business has no say-so as to whether it is listed on Yelp. So to your point Yelp does not actually allow all reviews to remain published. And to Blake's point I agree, it amounts to extortion.

Bob Henry (Los Angeles wine industry professional) said...

Supplementing your citing of the local CBS station press coverage:

"Judge Dismisses Suit Against Yelp" -- Wall Street Journal

Jeff Siegel said...

This is also common practice on sites like Angie's List, where my electrician was told he could get better positioning and ratings by buying an ad.

As bad as the court ruling is (though my one quarter of journalism law doesn't make me an expert), what's worse is that the companies who do this think it's OK to do. How little must they care for the consumers they claim to serve?

Mark Entel said...

Yikes, will have to read the actual decision but speaking just to the Yelp! issue I feel like the average user/restaurant-goer is also a harmed party. This practice amounts to false advertising, since Yelp claims it is showing how users rate a resto, but in reality they are putting a thumb on the scale and presenting a manipulated rating.

Mark Entel said...

would also add, selling wine ratings this sounds like pay-ola scandals from 20th century radio

Karl Lung said...
This comment has been removed by the author.
Karl Lung said...

All goes down to just one issue:

Independence of rating agents!

Bill Dyer said...

The following practice is quite common among the wine publications that both review wines and accept advertising. The same notification the winery receives informing them of the score their wine has been given includes an offer to have their label printed alongside the review. The price of doing so in one publication I recall to be about $1100 dollars. By doing so, the winery guarantees their review will appear in print. By not doing so, the magazine might only post the review in their on-line data bank, and the criteria as to which reviews the magazine choses to print without the payment for the label reproduction is not transparent. I suspect their decision has to do with how high a profile the brand has, and the chances the publication has for a future shakedown.