Beck & Lee (Miami) and the Weston Firm (San Diego) filed a class action lawsuit against Yelp yesterday. Why? Well, according to the Yelp Class Action Website, “the lawsuit alleges that Yelp runs an extortion scheme in which the company’s employees call businesses demanding monthly payments, in the guise of ‘advertising contracts,’ in exchange for removing or modifying negative reviews appearing on the website.”
Last year, Kathleen Richards at East Bay Express wrote an article about how several businesses in the Bay Area were contacted by Yelp. John, a restaurant owner in the Bay, was contacted about negative reviews that were featured prominently on his Yelp site. “We can move them,” said the Yelp sales rep. Then came, “Well, for $299 a month.” Ha! What?! Although the article mentions this issue is addressed in the Yelp FAQ, there are a number a local business owners that challenge the statement. Yelp denies the statements addressed in Richards’ article though. The Wall Street Journal did an article on these events.
These recent allegations stem from a veterinary hospital in Long Beach, California who asked that Yelp remove a false defamatory review from the website. In response, Yelp refused to take down the review. Instead, Yelp sales reps repeatedly contacted the hospital to demand roughly $300/month in exchange for hiding or removing the review. Yelp plans to “dispute it aggressively” according to their response to TechCrunch.
The case, styled Cats and Dogs Animal Hospital Inc. v. Yelp Inc. was filed yesterday and is pending in U.S. District Court for the Central District of California.
My friend Brian hits up Yelp like a junkie; he loves using the site. In fact, I’ve caught him (and poked fun at him for) reviewing a restaurant on Yelp immediately after he came home from dinner. He also refers to Yelp for practically any new dining and shopping option (I prefer the old fashioned method of phoning friends). And did you hear the one about the infuriated bookstore owner? For those reasons, I can see the power that Yelp has on local businesses. Whether or not I believe the stories, I guess we’ll have to see what unfolds in court… Comments? Thoughts? Please share them with us!
4 comments
Brian says:
February 24, 2010 at 5:34 pm (UTC -7 )
Don’t forget dentists and upcoming events! yelp has those too ;P
bob says:
March 24, 2010 at 2:31 am (UTC -7 )
this talk about extortion is true. I’ve worked at a few prominent bars in Boston and Cambridge and it is a well known fact. I’ve managed some of these locations and bar tended at a few and in the last few years many an owner has complained of the legality of it all. how is a small business owner too cope with this? stand your ground and lose business or pay to play? i hope the bastards get taken for all they have,f.b.i. gets involved? r.i.c.o.? sued into failure? they’ve ruined hard working peoples lives.once again the extortion is a FACT! More people will come forward and hopefully this will all end with these degenerates going too jail or going broke!
DTLA says:
June 24, 2010 at 1:58 pm (UTC -7 )
Yelp is a tremendously useful tool. I rely on Yelp daily but have learned how to read between the lines. Overly positive reviews are as false as overly negative ones( and what business owner hasn’t had friends, relatives, coworkers and even themselves produced glowing 5 star reviews for their own establishments?).
When I research on Yelp, I review who is doing the review before I take heed of their particular review. So if Johnny B. reviewed a new restaurant I am interested in but he has only produced 2 or 3 reviews on other restaurants, his opinion does not hold much water. Same with someone that has thousands of reviews, they are just “review collectors” writing brief quips on as many places as possible, many of times without event being a patron. I have rarely found Yelp to be misguiding me and many times I have tried places that got bad reviews but from crappy reviewers.
Yelp is the Consumer Reports of restaurants, smart business owners will realize that yelp is the ultimate Focus Group for their business and will use them to make their business better. If your business is solid you have nothing to worry about. One or two bad reviews from a couple knuckleheads won’t cripple a solid foundation and will be even less relevant with good business consistency.
Get with the times and embrace technology, never fear it!
Justin says:
July 9, 2010 at 9:18 am (UTC -7 )
@ DTLA
I happen to agree with you on what Yelp attempts to do and the necessity of review websites. Before I buy anything or go to any establishment, I always do my research on the said product/service and see what others thought of their experience.
That being said, the whole fabric of review websites is to show the good and the bad. If a restaurant sucks, I want to read about it. The fact that Yelp calls up companies to extract money in exchange of removing these negative reviews defeats the whole purpose of writing a review. I find that grossly unprofessional at best and grounds for legal action (obviously, hence this blog) and/or them being shut down at worst. Just think about all the terrible companies that can just spend some money and wipe away all the negative, but honest, reviews posted. Terrible.