One of the more popular business ratings sites is headed to court. Yelp faces charges that it essentially demanded bribes from several businesses in return for removing negative reviews.
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.
But since late February, at least three lawsuits seeking class action status have been filed against the site by a dozen companies, complaining that reviews are manipulated depending on which companies advertise on the site and which ones do not.
The companies want Yelp to cough up, among other things, money that Yelp collected from businesses that were essentially strongarmed into advertising on the site. The legal term for such conduct is "reciprocal trade practices." Such practices are considered highly anti-competitive.
One of the suits, whose lead plaintiff is a Long Beach animal hospital, alleges that Yelp has actually gone as far as to restore negative reviews and delete positive reviews from businesses who refuse to advertise.
Yelp contends that the plaintiffs don't know how its business works.
Yelp says some reviews might come and go because it relies on an automated program to weigh reviews and filter out ones that might be untrustworthy, such as a negative review a spa owner might write about a competitor. Yelp says it does nothing to manipulate reviews, aside from allowing advertisers to choose one review they would like to feature at the top of the page about their business.
The company's CEO, Jeremy Stoppelman, also suggests that the timing of the suit is highly suspicious. Yelp just got a massive capital infusion. However, Yelp has faced complaints about possible reciprocal trade practices and extortion even before then. KPIX-TV in San Francisco ran a story back in 2008 alleging similar practices to those in the lawsuits. Another story ran in the East Bay Express back in 2009.
How serious is this? General Tire was ultimately forced out of broadcasting in part because it extorted several vendors into advertising on TV stations it owned. Similarly, these suits allege conduct that, if true, could put Yelp out of business.