A little story i’ve been following for about a year now, regarding Yelp and their “advertising sales tactics” seems to have grown some teeth.  According to numerous sources, a class action lawsuit has been filed in Los Angeles Superior Court against Yelp, the massive directory / review website, alleging:

The lawsuit alleges that Yelp runs an extortion scheme in which the company’s employees call businesses demanding monthly payments, in the guise of “advertising contracts,” in exchange for removing or modifying negative reviews appearing on the website.

I can’t say this comes as much of a surprise.

While normally my first reaction to such news would be consternation about the increasing prevalence of SLAPP lawsuits against organizations with highly public websites, in this case these types of complaints against Yelp have been getting louder and more frequent for over a year now.  In my limited exposure to Yelp’s selling tactics, I’ve seen none of this — but what I have seen leads me to believe there may be some credibility to these allegations.  Not only does Yelp populate business information on their site without the consent (and usually without the knowledge) of the businesses concerned, but has no compunctions about cold-calling these businesses to sell them on advertising contracts.  I’ve only seen them do the old “get in now before we raise our rates” sell, but even that irked me.  Funny enough, their rates haven’t changed much in the last two years.

Cats and Dogs Animal Hospital v. Yelp, 10-1340, U.S. District Court, Central District of California (Los Angeles), the plaintiff alleges that Yelp sales personell contacted the business to offer to remove negative reviews in return for a one year advertising contact.  According to the firms behind the class action, Beck & Lee Business Trial Lawyers and The Weston Firm, they have been contacted by “dozens” of businesses around the country about joining the action.

Regardless of the veracity of these claims, Yelp’s taking a hit on this one, and I don’t doubt that the PR machine is getting up to speed right about now.  Yelp can’t afford to have their system’s integrity called into question; everybody knows that the net is full of trolls and other assorted riff-raff (many of whom are quite hilarious, actually), and so everyone I know takes reviews with a grain of salt.  But the allegation that the system itself is feeding off this kind of behavior, that just won’t do.

And as usual, the other sharks smell the blood in the water. Competitors such as ChoiceVendor are already issuing statements reassuring their users of THEIR good intentions and lack of Corleone-style tactics, which if nothing else, will get them a bit of press coverage, even if it is throwaway linkage (as it is here.)

Yelp’s response?  Ah, not so strong and general vauge PRspeak for “uh gimme some time to come up with a better line”:

Yelp provides a valuable service to millions of consumers and businesses based on our trusted content. The allegations are demonstrably false, since many businesses that advertise on Yelp have both negative and positive reviews. These businesses realize that both kinds of feedback provide authenticity and value. Running a good business is hard; filing a lawsuit is easy. While we haven’t seen the suit in question, we will dispute it aggressively.

Not a real impressive response, if you ask me. A claim of innocence with a rationale that doesn’t support it, a general statement of value, an unsupported assumption, a false dichotomy mixed with “hang the lawyers”, and then the general excuse for the lack of real comment.  Ah, corpspeak!

Will have to see where this goes.  I’m gonna laugh if they subpoena Yelp’s CRM data!

Other Coverage:

• Cats & Dogs Animal Hospital on Yelp
• Yelp Class Action Blog
  
• Wired
  
• ArsTechnica
  
• TechCrunch
  
• GigaOm
  
• East Bay Express
  
• Metafilter