yelp.jpgOnly weeks after a judge dismissed a class action lawsuit by a group of small business owners against Yelp, that very same group has filed a second suit claiming extortive business practices by the popular review site.

The new suit adds a few allegations to the laundry list of long-standing complains many small businesses have with the company. It now alleges that the San Francisco-based site paid people to write reviews and actively manipulated the placement of negative reviews on the pages of various businesses in an effort to coerce them into buying advertising.

John Mercurio, the owner of the Santa Clara auto shop Wheel Techniques and one of the plaintiffs in the suit, claimed that the company moved a one-star review to the top of the Wheel Techniques page immediately after he declined to buy advertising.

“Within minutes, a one-star review was moved to the top of its Yelp review page,” the suit alleges. “Upon information and belief, Yelp placed the one-star review at the top of the Wheel Techniques review page as a threat to cause Wheel Techniques to fear that if it did not pay Yelp money to advertise, the negative review would remain at the top of its Yelp review page and/or additional negative reviews would appear, and lower its overall star rating.”

Other businesses claim Yelp offered to move bad reviews to more inconspicuous locations on their site in exchange for ad buys.

The filing of this second lawsuit, nearly identical to the one Judge Marilyn Patel dismissed last month, was widely expected. In April, Patel ruled the plaintiffs lacked sufficient evidence to support a case of direct extortion.

“Plaintiffs do not appear to argue that Yelp ever explicitly threatened to harm their businesses, through manipulating user reviews, if they refused to purchase advertising,” Patel wrote in her order to dismiss. However, she left the door open for a case based on “implied extortion” and gave the plaintiffs 30 days to refile.

Yelp has successfully defended itself from a number of similar lawsuits in the past. In recent days, a New York dentist, who sued the company for allegedly removing the majority of his practice’s positive reviews after he complained about the high placement of a negative one, had to pay Yelp’s $80,000 in legal fees after losing his case against the company.

Even outside of a legal context, Yelp has been on the receiving end of mountains of criticism over the years for making businesses they solicit feel like they’re being extorted. A 2009 story in the East Bay Express drew national attention to the site’s business practices.

The main complaint that many businesses and reviewers have with the site is what they say is the lack of transparency as to how its system of operates–why certain reviews rise to the top of a given business’s page and others are removed without so much as an explanation.

Yelp argues that some reviews are deleted to promote site-wide objectivity–preventing the friends and family members of a business owner from posting positive reviews and, conversely, to prevent competitors from posting negative ones.

Additionally, there’s also no way for a company opt out of having a page on the site, so Yelp will inevitably hold some degree of power over any business.

In an effort to curtail this some of this criticism, the company has made significant changes to its site over the past year. Yelp now allows users the option of seeing every review of a given business without the benefit of its filtering. Also, the site is eliminating the “Favorite Reviews” feature that allowed advertisers to select which review appeared at the very top of their page.

Since launching in 2004, Yelp has leveraged its social media component to overtake a gaggle of more established competitors like Citysearch and Yahoo! Local to become the undisputed king of its niche, logging over 17 million user reviews last month.

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  • Bobnoxious

    We have the same problem over and over again! Attached is my most recent letter to Yelp.

    November 5, 2011 By Registered Mail and email

    Mr. Jerry Stoppleman
    President, Yelp
    706 Mission Street, 7th Floor
    San Francisco CA 94103

    Re: Messing with reviews

    Sir:

    Thank you for your non response to my previous letter. I repeat; I know you claim it doesn’t happen but it has happened to us again. I know we are targeted because we didn’t buy your advertising.

    We were recently contacted by a very pushy salesperson to do marketing with you. Immediately when we turned her down our good reviews started disappearing again and the bad ones stayed. I know you are doing it as the same thing happened before. She made all kinds of “offers” and we explained what we were concerned about what had happened before and didn’t see the value as Yelp removes our good reviews and saves the bad ones forever. She advised we could report the problem (we have many times) but to no avail.

    Before we have to take action on this I am requesting you remove ALL the reviews on the Fior d’ Italia. We can then see what happens. You have filtered out many of the good ones so now filter them all out!

    Sir, I am not going to drop this. Please advise what you intend to do.

    Sincerely,

    Bob Larive
    President and CEO, Fior d’ Italia, Inc.

    Attachment

    Cc: Elif Arslan
    C. Langel Esq.
    Congressman Wally Herger
    Congresswoman Nancy Pelosi
    Congressman Tom McClintock
    Golden Gate Restaurant Association
    California Restaurant Association
    National Restaurant Association

  • Bobnoxious

    We have the same problem over and over again! Attached is my most recent letter to Yelp.

    November 5, 2011 By Registered Mail and email

    Mr. Jerry Stoppleman
    President, Yelp
    706 Mission Street, 7th Floor
    San Francisco CA 94103

    Re: Messing with reviews

    Sir:

    Thank you for your non response to my previous letter. I repeat; I know you claim it doesn’t happen but it has happened to us again. I know we are targeted because we didn’t buy your advertising.

    We were recently contacted by a very pushy salesperson to do marketing with you. Immediately when we turned her down our good reviews started disappearing again and the bad ones stayed. I know you are doing it as the same thing happened before. She made all kinds of “offers” and we explained what we were concerned about what had happened before and didn’t see the value as Yelp removes our good reviews and saves the bad ones forever. She advised we could report the problem (we have many times) but to no avail.

    Before we have to take action on this I am requesting you remove ALL the reviews on the Fior d’ Italia. We can then see what happens. You have filtered out many of the good ones so now filter them all out!

    Sir, I am not going to drop this. Please advise what you intend to do.

    Sincerely,

    Bob Larive
    President and CEO, Fior d’ Italia, Inc.

    Attachment

    Cc: Elif Arslan
    C. Langel Esq.
    Congressman Wally Herger
    Congresswoman Nancy Pelosi
    Congressman Tom McClintock
    Golden Gate Restaurant Association
    California Restaurant Association
    National Restaurant Association

  • 74911RS

    I have noticed the same thing. I have a buddy who owns Bullseyedent.com and he is the best businessman and car repair guy I have ever met. He gets nothing but 5 star reviews, but for some reason Yelp has (in their infinite wisdom) decided to hide about 30% of these reviews from his main profile page. He knows it’s because he decided not to upgrade his account. Nobody can prove this stuff in a court of law, but everyone knows it’s true.

    The guys that own Yelp are unscrupulous and common thieves.

    They harm the reputation of businesses by either hiding good reviews, or demoting them in favor of harmful reviews, in order to ‘encourage’ their clients to get on board with their pay-to-play schema.

    Disgusting and wrong. It is just abuse, and these guys know it, and so do the judges. They can’t convict because the guys at Yelp probably have slick (expensive) lawyers who know exactly how far to push it, just shy of getting them caught.

    Despicable, and not okay.

    For comparison, go check out Wheel Techniques own review page here: and you’ll see how great they really are.

  • 74911RS

    I have noticed the same thing. I have a buddy who owns Bullseyedent.com and he is the best businessman and car repair guy I have ever met. He gets nothing but 5 star reviews, but for some reason Yelp has (in their infinite wisdom) decided to hide about 30% of these reviews from his main profile page. He knows it’s because he decided not to upgrade his account. Nobody can prove this stuff in a court of law, but everyone knows it’s true.

    The guys that own Yelp are unscrupulous and common thieves.

    They harm the reputation of businesses by either hiding good reviews, or demoting them in favor of harmful reviews, in order to ‘encourage’ their clients to get on board with their pay-to-play schema.

    Disgusting and wrong. It is just abuse, and these guys know it, and so do the judges. They can’t convict because the guys at Yelp probably have slick (expensive) lawyers who know exactly how far to push it, just shy of getting them caught.

    Despicable, and not okay.

    For comparison, go check out Wheel Techniques own review page here: and you’ll see how great they really are.