Yelp Inc., a review website based in San Francisco, is facing a lawsuit and some serious allegations of removing negative reviews in exchange for paid advertisements.
Yelp, like most other review websites, allows consumers to post reviews of businesses' products and services (restaurant reviews are the most popular). While listings and reviews are free, Yelp sells ads to generate revenue. Fair enough.
Recently, however, nine small businesses have joined a lawsuit accusing Yelp of extortion and fraudulent business practices.
Ouch.
The new plaintiffs, include a Chicago bakery, a Washington, D.C. restaurant and a California furniture store.
The original plaintiff, a veterinary hospital in Long Beach, California, asked Yelp to remove a negative review that violated Yelp's guidelines. Seems reasonable.
Yelp removed the review, but then it reappeared. The suit alleges that Yelp's sales representatives repeatedly contacted the hospital offering to hide any negative reviews if it bought advertising from Yelp.
There's more.
Now, the owner of Chicago's Bleeding Heart Bakery alleged that Yelp offered in exchange for a paid sponsorship to push any bad reviews to the end of the bakery's listings on Yelp's site.
Yelp denies any wrongdoing and believes the suit is without merit.
This past Monday, Yelp posted on its blog why reviews disappear and reappear.
"The most common reason for reviews not appearing on a business page has to do with Yelp's Review Filter, a system whose sole purpose is to distinguish between trustworthy reviews and less-established ones and then decide which of those to show over time."
Most take review sites with a grain of salt.
Are the reviews real? Do businesses post false reviews on their competition?
More coming on this topic.