Yelp Accused of User Review Extortion Racket
February 25, 2010
(ChattahBox)—Apparently the consumer online review site Yelp is taking a page out of the book of Tony Soprano. The San Francisco-based site is being accused in a lawsuit of running an online extortion racket, by publishing fake negative reviews about a business and then pressuring that business to ante up for a paid $300 a month subscription, in exchange for removing the negative reviews. A Long Beach veterinary hospital named Cats and Dogs Animal Hospital, didn’t play ball and cried foul, when the owner became subjected to high-pressure sales tactics after two suspect negative reviews appeared on the Yelp site. The veterinarian filed a federal class action lawsuit against Yelp for extortion.
The veterinary hospital owner Dr. Gregory Perrault sued Yelp for violations under the unfair competition law. His complaint noted that:
“Ratings-based websites, including Yelp.com, are highly popular, and have great power to direct the flow of commerce in a given area. Users frequently read ratings and reviews for all of the businesses in a particular category and locale and then decide where to spend their money based on those ratings and reviews.”
Perrault says in his complaint that Yelp manipulates negative user reviews and then offers “to remove a business’s negative reviews or relocate them to the bottom of a listing page where fewer searchers will read them if the business agrees to purchase a costly monthly advertising subscription from Yelp.” Yelp’s high-pressure sales people also promised Perrault that the site “would ensure negative reviews will not appear in Google and other search engine results, if he agreed to purchase an advertising subscription with Yelp.”
One of the suspect negative reviews described Dr. Perrault, as “an @$$” and “a jerk, a D-Bag, And so arrogant.” That inflammatory review appeared soon after Perrault asked for another negative review to be removed, because it violated Yelp’s own guidelines. The first negative review was removed and in the interim Perrault was besieged with numerous sales calls from Yelp. When Perrault refused to buy an advertising subscription; the more inflammatory review appeared, which also claimed that the customer ran into Perrault at a store and “he rolled his eyes and looked away!!!! Later, the first negative review reappeared, after being removed. And Perrault continued to be besieged by Yelp sales calls.
Perrault’s claims are backed up by accounts from other business that experienced similar experiences with Yelp and its high-pressure sales tactics, promising to remove a negative review in exchange for a costly advertising subscription.
Perrault’s attorney issued a press release saying, “Yelp!’s sales tactics amount to high-tech extortion,” “The victims tend to be small businesses, such as our client, who often have no choice but to pay Yelp! exorbitant sums in order to prevent further harm to their livelihoods.”
See Wired Threat Level for more.