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As Yelp Looks to Stop Extorting Money from Business Owners, will Google Follow Suit?

May 8th, 2010 8 comments

Yelp has been the target of lawsuits recently.  For example, according to this WSJ report:

Nine small businesses have joined a lawsuit accusing local business review start-up Yelp Inc. of extortion and fraudulent business practices.

The newest plaintiffs were officially added Tuesday in an amended complaint filed by two law firms…. The new plaintiffs include a Chicago bakery, a Washington, D.C., restaurant and a California furniture store, among others.

The original plaintiff in the putative class action suit, a veterinary hospital in Long Beach, Calif., said it had asked Yelp to remove a negative consumer review that violated Yelp’s site guidelines. According to the complaint, San Francisco-based Yelp initially removed the review but it reappeared and Yelp later declined to remove it and other negative reviews. The suit alleges that Yelp’s sales representatives repeatedly contacted the hospital offering to hide any negative reviews if it bought advertising from Yelp.

In the amended complaint, 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. The bakery owner alleged that one of Yelp’s sales representatives said they would personally remove reviews identified by the owner as “bogus.”

“Yelp’s practices are extortionate and especially harmful to small businesses, such as our clients, who are particularly vulnerable to reviews posted on the site,” said Jared H. Beck, co-managing partner of Beck & Lee, referring to the original plaintiff and the nine new ones.

Yelp denied any wrongdoing and said that it reviewed the amended complaint and still believes the suit is without merit. “The allegations stem from confusion over how our review filter works to protect consumers from fake, or shill, reviews and businesses from malicious reviews from competitors,” said Vince Sollitto, Yelp’s vice president of communications. Read more…