Yelp, a site that allows customers to write reviews of businesses, is the subject of an interesting lawsuit that alleges that the San Francisco company engages in secret quid pro quos with businesses under which it removes negative reviews in exchange for advertising.
The complaint includes an account from Mary Seaton, the owner of a furniture store in San Mateo, who says that Yelp took down negative reviews and replaced them with old positive reviews — once she agreed to pay for advertising. The negative reviews returned, she claims, when she stopped paying for advertising.
The effective extortion claims fall short of a guy in a gray fedora and bulging jacket and no neck appearing at a store and asking “yous maybe want da bad reviews to go away?” However, businesses insist that the website is an Internet version of a shakedown operation.
The class action contains various such accounts following the same pattern, here.
Businesses have been organizing anti-Yelp websites, here.
Yelp reviews have previously led to litigation (here, but this claims is directed against the company as opposed to reviewers. The company was accused in 2009 of shady dealings with advertisers, here.
It will be interesting to see the defense on the case and whether the company claims a rogue employee defense – much like ACORN in its recent controversy. It could make for a highly damaging trial for the company, which would have to show that the negative comments are removed as part of a routine and unrelated process.