Yelp Faces Lawsuits for Unfair Business Practices

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Yelp, one of the most popular Web sites that let people post opinions about restaurants, shops and local services, is being sued by several small businesses that claim they've been pressured to advertise on the site in exchange for getting negative reviews squashed.

San Francisco-based Yelp has faced many complaints since it began letting consumers post reviews about local businesses ranging from all-you-can eat buffets to zip line operators six years ago. Often businesses have complained about how reviews on the site — positive or negative — can mysteriously disappear and reappear.

The lawsuit began with Cats & Dogs owner Greg Perrault, who said in a court filing that after receiving negative reviews on the site he started getting calls from Yelp, informing him that if he advertised Yelp would hide or lower negative reviews on his page and let him choose the order of the reviews. Perrault told the press that he decided not to advertise, and a week later a negative review that had disappeared from his page reappeared. He also received a second negative review from someone who had previously written one, he said. Yelp refused his request that the reviews be removed, he said.

The lawsuit seeks an order barring Yelp from manipulating reviews and forcing the company to return money reaped 'by means of its wrongful acts and practices,' along with unspecified damages.

Yelp sayA lawsuit filed recently on behalf of California-based Cats and Dogs Animal Hospital has now been joined by nine additional small businesses, including Sofa Outlet, Le Petite Retreat Day Spa, and Scion Restaurant. The suit, like another filed against Yelp by D'ames Day Spa of California, alleges Yelp alters content on business listing pages in order to favor paying advertisers.

The suit states, 'the company asks business owners for 'protection' from bad reviews (in the form of advertising dollars) while Yelp controls whether bad reviews are posted in the first place-the classic scheme of offering 'protection' from a problem that the 'protector' himself creates.' The suit also alleges Yelp removes or relocates negative reviews and creates positive reviews for advertisers.

'Yelp does not manipulate review content to help advertisers or hurt businesses that don't. Never have, never will,' stated the company in its most recent post regarding its legal woes, posted yesterday.

In order to ensure the validity of its reviews, Yelp keeps a watchful eye on who is posting those reviews in order to prevent sales of positive reviews by phony reviewers. About two years ago, Adryenn Ashley was labeled as a phony reviewer, or spammer, by the site, though she claims she did not violate Yelp's terms of service. After discussing the issue with the company but not getting the simple 'apology' she said she requested, Ashley decided to launch two anti-Yelp Web sites. Ashley also runs a service claiming to help businesses 'outsmart Yelp' on her Wow! Is Me site.

'Yelp-Sucks.com is dedicated to allowing dissatisfied Yelpers vent their complaints about the site; yet, several forums and blogs around the Web feature gripes from reviewers or small businesspeople about Yelp. Ashley's second Yelp site, YelpLawsuit.com, serves a far more potentially damaging purpose - collecting names of alleged victims of Yelp's practices for a federal class action suit against the company.

'Now that the class action suit has been filed, it is even more imperative that we gather information on the victims from around the country,' states Yelp-Sucks.com. 'I know for many of you this has been a long time coming, but rest assured, Yelp WILL have to answer for their business practices.' The site requires interested parties to submit their first names and e-mail addresses.

Ashley said lately she's received between five and 10 submissions each day, and has collected 'over 1,000' potential plaintiffs' names over the past two years. 'I am working on a discovery strategy for a law firm,' she told ClickZ News.

What's more, she claims she has been contacted by 'at least five [law firms] in the last month,' asking for her to provide the list of names she's compiled. Ashley would not name any of the law firms she has been in contact with regarding the Yelp situation. 'I'm just a point of reference for all of them,' she explained, stressing that they have come to her. 'They can all call me and I will introduce them to the list. Not one law firm is going to be able to handle all these people.'

Law firm Girard Gibbs LLP could be one of those interested firms. Spotting a potential lawsuit in the negative experiences some businesses have had with the site, the company operates its own Yelp suit plaintiff discovery process. Girard Gibbs recently advertised on Google, targeting ads promoting its 'Yelp Legal Investigation,' against searches for terms including 'Yelp lies' and 'Yelp lawsuits.'

One business owner said that after responding to a negative Yelp review from a customer, he got a call from a sales representative asking him to pay several hundred dollars a month to advertise. Gutgsell said the Yelp representative explained that if he did so Yelp would help him control his good and bad reviews.

After a rash of complaints early last year, Yelp started allowing businesses to respond publicly to customers' critiques right on their Yelp pages. Previously businesses could contact reviewers only privately. Yelp also has hired an outreach manager who has met with business owners and business groups.