Yelp.com finally getting sued for what they really are. Legalized extortion.

[Zee]

Wall Street Journal article

http://blogs.wsj.com/law/2010/02/26/real-people-real-reviews-real-extortion-scheme/

Companies, of course, get sued all the time. They get accused of fixing prices, of workplace discrimination, of inflating revenue figures. They sue each other for ripping off their intellectual property, and pay billions to the public when their products misfire.

But a recent suit filed against San Francisco-based Yelp makes an allegation that, in some ways, seems fundamentally more far-reaching than the above types of suits. The suit alleges that the services provided by Yelp, consumer-driven reviews of restaurants, retailers, products, (and other stuff) are, at their essence, fraudulent.

The allegations, embodied in a lawsuit filed in Los Angeles federal court on Wednesday (click here for the complaint), go like this: In some occasions, if someone posts a negative review of, say, a restaurant, Yelp workers will call the restaurant and offer an advertising package whereby for, say, $300, the restaurant will get some advertising on the site as well as the bad review removed.

The complaint is chock full of alleged examples, like this one:

Mary Seaton, the owner of a furniture store in San Mateo, took Yelp up on an offer to remove her negative reviews if she advertised at a cost of $350 per month for six months. During that time, her negative reviews were removed and old positive ones showed up. After her contract was up, a negative review appeared, which Seaton said contained lies.

Furthermore, according to the complaint, Yelp employees have, on occasion, written negative reviews of businesses. Click here for an NYT blog post on the lawsuit; here for a story from TechCrunch, which first reported the suit.

Yelp has yet to respond to the suit in court, but issued this statement to TechCrunch, claiming it will defend the suit “aggressively.”

Yelp provides a valuable service to millions of consumers and businesses based on our trusted content. The allegations are demonstrably false, since many businesses that advertise on Yelp have both negative and positive reviews. These businesses realize that both kinds of feedback provide authenticity and value. Running a good business is hard; filing a lawsuit is easy. While we haven’t seen the suit in question, we will dispute it aggressively.

It should be an interesting suit to play out. We wouldn’t necessarily say Yelp’s existence is on the line, but there’s a lot more at stake here for the company, it seems, than money. We’re talking, of course, about the company’s credibility, which it of course has to have in order to continue being a thriving business and influential player on the Web.

Long story short, i knew Yelp was a BS website. I've noticed for a long time now, that on lot of reviews of various companies, any moderate or negative but obviously very useful feedback gets "filtered" (basically hidden unless you click on a very tiny link at the bottom of the page). When i read the "Filtered" reviews, i hardly EVER (nyc region) see why it should be "filtered" except it's not five stars.


Update: "Yelp Wants Your Help"
Yelp Wants Your Help

Last week, the beleaguered online review site announced changes to the way it works in hopes of stemming legal complaints and allegations of extortion from small companies.

Businesses will no longer be allowed to choose which reviews appear at the top of listings, and the site will allow users to see every review, not just those the company has filtered out.

Err, did they just admit guilty on the lawsuit?

 

[Capt Caveman]

My bad review of a restaurant on Yelp has remained for almost two years.

 

[Zee]

My bad review of a restaurant on Yelp has remained for almost two years.

...because that company refused to buy the ad package

 

[M0oG0oGaiPan]

if it's legalized then what's the problem?

 

[TridenT]

Maybe this only applies to large cities like LA and San Fran and NYC?

I doubt for Portland and Vancouver, WA they do this...

And if this is true, Yelp should be sued into oblivion and beyond.

 

[preslove]

Wow, I didn't know that they took down the negative reviews for advertisers. That's pretty messed up.

 

[acheron]

I figured most negative reviews are BS anyway. Likely someone who works for a competitor, or just a self-entitled whiner.

 

[PingSpike]

How is that not extortion?

 

[PricklyPete]

Wow, I didn't know that they took down the negative reviews for advertisers. That's pretty messed up.

They allegedly did that. Just because someone or group has accused them does not make them guilty. That is what the court is for. Let me make myself clear...in NO WAY am I defending them. I have no reason to believe either story...but to automatically assume the company is guilty based on some business owners accusation who have motivation to defame the company...that just isn't fair.

 

[torpid]

Are there people who actually trust the reviews on yelp?

 

[OCGuy]

I wrote a positive review on yelp and it was taken down 2 days later...

F them.

 

[zerocool84]

Are there people who actually trust the reviews on yelp?

I don't. Yelp sucks.

 

[moshquerade]

Crooks.

 

[TechBoyJK]

ripoffreport.com is the same way.

Someone posted a review full of lies, saying we lied to them and frauded them and didn't provide the service (even though I was personally working on the trouble tickets). Shortly there after, ripoffreport contacted us saying that they noticed someone posted a negative review, and said we could sign up to dispute it. We had to pay to sign up to dispute it, and it was a significant sum. We just let it be.

 

[coldmeat]

I don't see a problem with it, as long as the reviews were not written by them. It's their website, they can do what they want.

I did see that there are claims that they did write some though.

 

[keird]

I just left a good review for a heating service on Angie's List that was accepted. That site seems reputable.

 

[Zee]

Last week, the beleaguered online review site announced changes to the way it works in hopes of stemming legal complaints and allegations of extortion from small companies.

Businesses will no longer be allowed to choose which reviews appear at the top of listings, and the site will allow users to see every review, not just those the company has filtered out.

::facepalm::

 

[ViviTheMage]

Online review sites typically suck ... so anyone who trusts yelp is doomed anyway.

You're better off looking into communities for multiple opinions...not just one source.

 

[AlienCraft]

They allegedly did that. Just because someone or group has accused them does not make them guilty. That is what the court is for. Let me make myself clear...in NO WAY am I defending them. I have no reason to believe either story...but to automatically assume the company is guilty based on some business owners accusation who have motivation to defame the company...that just isn't fair.

THIS JUST IN !!

Life isn't fair, The Fair isn't even fair.
Nothing is fair.
Death is fair.

 

[preslove]

Read the comments on the story. Quite a few business owners chimed in to say that this is really happening, and that Yelp also removes good reviews after you refuse to buy into their scam.
http://blogs.wsj.com/law/2010/02/26/real-people-real-reviews-real-extortion-scheme/tab/comments/

 

[shortylickens]

I don't. Yelp sucks.

This. They are fun entertainment but I would not trust them for my dining experience. I need to know for myself.

I still recall the one bar that got the dudes kicked out for not tipping and it started a nef fest of hateful reviews. I dont know how that got resovled. Did Yelp cave in and remove all of them or what?

 

[PricklyPete]

[/b]
THIS JUST IN !!

Life isn't fair, The Fair isn't even fair.
Nothing is fair.
Death is fair.

Maybe I missed something...did I say life is fair? Hmmm...don't remember saying that. I did say someone was being unfair to the company if they assumed guilt. I'd still say that sounds unfair...even if it is life.

 

[PricklyPete]

Read the comments on the story. Quite a few business owners chimed in to say that this is really happening, and that Yelp also removes good reviews after you refuse to buy into their scam.
http://blogs.wsj.com/law/2010/02/26/real-people-real-reviews-real-extortion-scheme/tab/comments/

The comments are pretty damning.

 

[TwinsenTacquito]

I've never heard of this company before. But if they both profit from collaboration in such a manner, that's trust because it can be argued that they both operate within the pleasure/entertainment industry. Making that connection is what would be the hardest part and what it all relies on.

 

[thegimp03]

Good. Hope Yelp burns.