Yelp Sued for Extortion—Again
A year ago, we first covered the extortion rumblings against local review site Yelp. Business owners claimed that Yelp offered to remove negative reviews—for a price. Yelp disputed the allegations, but did add a feature for business owners to respond to negative reviews last April.
But apparently the other practices haven’t ceased, according to two suits recently filed against Yelp. Last week, a class action suit was filed in a Los Angeles federal court, and this week another suit alleging extortion by the site was filed in California as well.
The first suit,Cats and Dogs Animal Hospital Inc. v. Yelp Inc., alleges “the company’s employees call businesses demanding monthly payments in the guise of advertising contracts, in exchange for removing or modifying negative reviews.” The second suit, D’Ames Day Spa v. Yelp, makes a similar accusation, stating that Yelp removed 13 of 14 positive reviews because the spa wouldn’t buy advertising on the site.
Yelp has responded to the allegations in a blog post, “Different Day, Different Lawyer, Same Meritless Claim: A Classic Race to the Courthouse.” Yelp points to a paragraph from the suit where the spa owner says she encouraged customers to leave reviews on the site. Said Yelp CEO Jeremy Stoppelman:
As we have explained in the past, solicited reviews, more so than naturally occurring ones, are more likely to be detected by Yelp’s review filter, which we employ to protect consumers from shill reviews and businesses from malicious reviews from competitors.
Stoppelman says they’re taking both cases seriously—but they’re both without merit and Yelp is confident they’ll prevail.
What do you think? Is Yelp extorting SMBs, or is it the other way around?