Does “the Market” encourage practices that are unethical but not illegal?

Yelp is a customer-driven review site based on San Francisco. It’s a great source for a variety of frank opinions about which businesses (restaurants, entertainment, services, even transportation) in your area are best. Yelp is also great for traveling, to catch the best spots in other cities.

Once again Yelp is facing allegations that its management tinkered with reviews to coerce smaller businesses into advertising on the (anonymous) site. This is pretty obviously unethical, but less obvious that there’s a viable legal case. This is a really good example of where “the market” encourages an unethical practice (putting ad pressure on businesses with bad reviews, because it will help the site and help the business) because it doesn’t quite break any laws (it’s probably not quite extortion or slander).

What do all you free market purists think? Should this customer-driven site be allowed to continue until the market decides it’s not worth visiting anymore? Or should “someone” step in to stop them?

Link to Yelp article here

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One response to “Does “the Market” encourage practices that are unethical but not illegal?

  1. Pingback: Clifford May on Torture Memos « Unkategorized

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