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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?

  • http://www.rypmarketing.com Adam Thompson

    I’m not sure, but I did find it interesting that one of the case studies for Yelp extortion was submitting fake reviews themselves (Yelp publicized their fake postings – they were all from free email addresses obviously created just to submit that review).

    It sounds to me like Yelp might be guilty of presenting their services in an improper way (though it seems they have changed that), but I don’t see any convincing evidence for extortion.

  • http://jjscoaching.com/ Melanie

    Its a gray area. So many people submit fake reviews on the own businesses that it seriously devalues the usefulness of services like Yelp anyway, so I suppose if Yelp felt that the reviews were faked they would be within their rights to yank them to avoid this.
    .-= Melanie ´s last blog ..Create a Successful Business by Identifying your Values and Priorities =-.

  • http://themarketingstuff.com Mario C.

    Would love to see a piece of that anti solicited reviews filter. It leaves me quite surprised that Yelp can pick up reviews made by happy and satisfied customers encouraged by the owner of the business (I kind of fail to see the problem with that in any case) and differentiate them from the ones left by real spontaneous reviewers…
    .-= Mario C.´s last blog ..Can everyone be an Internet Marketer? =-.

  • http://barexambrief.com Sean McGinnis

    I’m a bit surprised that a CEO of a feedback oriented company such as Yelp would blog on a platform that did not allow comments. Doesn’t seem very open, transparent, or customer friendly. Let’s assume a company actually did “solicit” reviews by asking their customers to visit their Yelp listing – how is that relevant to any charge of extortion? I don’t see the connection.
    .-= Sean McGinnis´s last blog ..Final February MBE Question of the Day (#52) =-.

    • http://www.marketingpilgrim.com Jordan McCollum

      The plaintiff is claiming that removing the positive reviews those customers left was their punishment for not going along with the extortion.

  • Dr Yorovich

    I think yelp needs to get rid of their stupid computer review filter & hire humans to judge before we turn this country into robocop city full of bots rolling around judging us.