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Court Says Yelp Is Allowed to Manipulate Ratings

Court Says Yelp Is Allowed to Manipulate Ratings


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The U.S. Circuit Court of Appeals has determined that Yelp manipulating rates to favor those that pay for ads is not illegal

Yelp

Do you agree with Yelp’s business tactics, or are they shady?

After a lawsuit accusing the review site of unethical business practices, in which Yelp was accused of inflating the scores of businesses who paid for advertising on the site, the U.S. Circuit of Appeals has ruled that what the ratings website is doing is in fact, not illegal. You win this time, Yelp. Even though yelp has adamantly denied these accusations, the court has maintained that Yelp — as a business itself — has the same rights as any other business, and that these “conflations” would actually be nearly impossible to prove.

"As Yelp has the right to charge for legitimate advertising services, the (alleged) threat of economic harm ... is, at most, hard bargaining, and not extortion or unfair business practices,” said Judge Marsha Berzon said in Tuesday's 3-0 ruling.

Yelp released a statement about the ruling, saying, “We are obviously happy that the court reached the right result, and saw through these thin attempts by a few businesses and their lawyers to disparage Yelp and draw attention away from their own occasional negative review.”

This ruling comes after the lower courts also dismissed a lawsuit by several businesses claiming that they were penalized for not buying advertising on Yelp.

For the latest happenings in the food and drink world, visit our Food News page.

Joanna Fantozzi is an Associate Editor with The Daily Meal. Follow her on [email protected]


Business Owners Seek To Revive Payola Lawsuit Against Yelp

A group of local business owners are asking an appellate court to revive their "extortion" lawsuit against the review site Yelp.

The business owners alleged in a case dating to 2010 that Yelp tried to extort them by promising to bury bad reviews and promote good ones in exchange for ad buys. Last year, U.S. District Court Judge Edward Chen in the Northern District of California threw out the potential class-action lawsuit, ruling that the federal Communications Decency Act immunizes Yelp from liability for reviews authored by users. Chen also ruled that Yelp isn't liable for decisions about how to display those reviews -- regardless of the company's motives for highlighting particular content.

But the business owners say that they should be able to proceed with their claim that Yelp unfairly summarized the reviews, as well as the allegation that Yelp "manipulated" the reviews by removing some and highlighting others.

The Communications Decency Act "does not give protection to internet service providers who manipulate reviews for their own profit, and based on such manipulation, publish their own misleading star rating and information about a particular business knowing it is not accurate," they argue in papers submitted to the 9th Circuit Court of Appeals.

Yelp -- which denies the extortion allegations -- counters that it doesn't lose its immunity for user-generated content by deciding which reviews to weed out and which to display. "Plaintiffs are a group of disgruntled business owners who seek to suppress this legitimate, protected online commentary and to prevent Yelp from exercising its right to screen reviews which may be false or unreliable," the company says in papers filed with the 9th Circuit late last week.

In 2010, Yelp was hit with a flurry of lawsuits alleging that it pressured businesses to purchase ads. The lawsuits were later consolidated into one potential class-action -- which Chen dismissed last year.

One company that sued, the Cats and Dogs Animal Hospital in Long Beach, Calif., said in court papers that a Yelp salesperson offered to move two bad reviews to the bottom of its results, to ensure they didn't appear in search engine results. It would also allow the hospital to decide in which order reviews would appear on the site, in exchange for a one-year, $300-a-month ad buy.

Yelp CEO Jeremy Stoppelman has denied that the site ever offered to bury bad reviews for advertisers. The company has said that it filters reviews that it believes violate its terms of service, including ones by business owners. After the lawsuits were filed, Yelp began allowing Web users to access reviews that had been filtered, but those reviews aren't counted toward the site's overall ranking.

Yelp also previously allowed business owners to pay to have a favorite review highlighted at the top of their page. The company discontinued that practice in 2010.


Share All sharing options for: Arizona Restaurateur Launches All-Out War Against Yelpers

A restaurant owner has launched an all-out war with Yelpers. If this sounds like a scene from the recent Yelp-themed episode of South Park, that's because it kind of is. Aric Mussman, the owner of Vero Amore — which has two locations in Tucson, Ariz. — tells KGUN9-TV that he was inspired by the animated show's "You're Not Yelping" episode which makes fun of Yelpers on power trips because they think they are restaurant critics. Mussman's restaurants now bear "No Yelpers" banners near the entrances.

Mussman's restaurants have high four star ratings on Yelp, so why did he decide to hang the banners? He explains, "Our reviews are great and that's why I want to be one of the people to stand up and say something." Mossman continues, noting that Yelpers are in it for the "notoriety": "You earn badges for reviews they earn online acclaim. That's where their friends are and they feel like this self-entitled thing that they can bash" restaurant owners with no accountability for their claims. Mossman is upset that people can write whatever they want to without having to do "any fact checking."

The restaurant owner has plans to create a "No Yelpers" movement across the city and is hoping a "watchdog organization" will be created. He says that he has gone to Yelp but that the company has been unhelpful. "If you go to Yelp and say 'Hey, these people make up lies about us.' They don't care." He adds that they will only help you if you "advertise with them." The claim that Yelp manipulates reviews based on ad sales is something the review site has been fighting in court for years. The FTC eventually ruled that Yelp is not up to any funny business. The review site tells the news station:

"There has never been any amount of money a business can pay Yelp to manipulate reviews. Any claims that Yelp manipulates reviews for money or that advertisers are treated any differently than non-advertisers are completely false and have been repeatedly dismissed by courts of law, thoroughly researched and disproven by academic study, and investigated by government regulators, including the FTC, who closed a nearly two-year investigation without taking action.

Because of Yelp's influence, small businesses are realizing that online reviews are incredibly important. Unfortunately, this sometimes leads to frustration, when businesses that don't like their reputation on a review site like Yelp realize they are unable to change it by trying to game the system due to our recommendation software. These businesses have only one last recourse: to discredit the site as a reliable source of information. At the end of the day, Yelp is a resource for consumers to find reliable information about how good or bad a business may be the site would be useless to consumers if every business could buy a five-star rating."

While Mussman's restaurants have four star ratings on Yelp right now, if enough pro-Yelp activists get involved, the restaurant's rating could tank. Already a few angry Yelpers have posted negative one star reviews on the restaurants' Yelp pages. One user even went so far as to post a picture of his middle finger with a review that reads, "Really though who do you think you are hanging a sign that says no Yelpers. go f-ck yourself and I will never be back." Watch the local news story below:


Yelp reviews, privacy laws hamstring doctors

Dr. Bob Field, background, leads Quest Diagnostics Camp after school program at Temescal Regional Recreation Area in Oakland, Calif., on Monday, October 3, 2016.

Scott Strazzante/The Chronicle Show More Show Less

2 of 3 Dr. Bob Field leads Quest Diagnostics Camp after school program at Temescal Regional Recreation Area in Oakland, Calif., on Monday, October 3, 2016. Scott Strazzante/The Chronicle Show More Show Less

3 of 3 Dr. Bob Field leads Quest Diagnostics Camp after school program at Temescal Regional Recreation Area in Oakland, Calif., on Monday, October 3, 2016. Scott Strazzante/The Chronicle Show More Show Less

Psychologist Bob Field was puzzled, then anxious, when enrollments plummeted by a third at Quest Therapeutic Camps, his Danville and Oakland program for children with emotional and social issues.

Eventually he realized the problem was negative reviews on Yelp, which he said were exaggerated or untrue and stemmed from families unhappy over billing. But his hands were tied by medical confidentiality laws from saying so on the online reviews site.

&ldquoIt really is a bind,&rdquo Field said. &ldquoI wanted to respond (online), but I couldn&rsquot. I emailed Yelp and said, &lsquoThis is libel. How can it be allowed?&rsquo and got no response.&rdquo

His problem is magnified across the medical world, with doctors, dentists, psychologists and other medical professionals saying that Yelp reviews, often used by prospective patients to vet providers, can be wielded as weapons by peevish &mdash or sometimes clinically disturbed &mdash people. The medical professionals say they have few ways to defend themselves.

Ironically, San Francisco&rsquos Yelp started when co-founder Jeremy Stoppelman was seeking a doctor to treat his flu and could only find generic information online. Health and medical providers now account for 6 percent of reviews, the sixth-largest category. Shopping (22 percent) and restaurants (18 percent) are the largest.

Dr. Bob Field leads Quest Diagnostics Camp after school program at Temescal Regional Recreation Area in Oakland, Calif., on Monday, October 3, 2016. Scott Strazzante/The Chronicle

&ldquoYelp is the bane of many doctors&rsquo existence,&rdquo said Dr. Jonathan Kaplan, a San Francisco plastic surgeon. &ldquoA patient can be really vocal, but you cannot. It&rsquos not a fair playing field.&rdquo

At the same time, doctors and others with years of training and experience resent being pigeonholed into the same reviews system used for manicurists or hamburger joints.

&ldquoOnline opinions of physicians should be taken with a grain of salt, and should certainly not be a patient&rsquos sole source of information when looking for a new physician,&rdquo the American Medical Association said in a statement. &ldquoChoosing a physician is more complicated than choosing a good restaurant, and patients owe it to themselves to use the best available resources when making this important decision.&rdquo

In Field&rsquos case, eventually he figured out a strategy. He emailed other parents asking them to consider leaving their own reviews. More than a dozen responded, boosting the camp&rsquos rating from one star to 4.5 stars. He replied online to the most negative review simply stating that Quest&rsquos parent surveys found a 94 percent satisfaction rate. He also tried contacting the negative reviewers privately to address their issues, although that didn&rsquot result in any changes.

Field&rsquos approach reflects advice from experts and Yelp itself.

&ldquoPatients can post very detailed information about themselves and their providers, but the providers have to be very vague when they respond, not even confirming that the reviewer is a patient,&rdquo said Danika Brinda, who runs Planet Hipaa, a business advising medical professionals on private and security. Its name refers to the Health Insurance Portability and Accountability Act, a 1996 law that set national standards to safeguard patients&rsquo medical privacy. While providers can post a response, &ldquoThey cannot even say, &lsquoI&rsquom sorry your visit wasn&rsquot good&rsquo because that confirms someone was a patient,&rdquo she said. &ldquoInstead they should try to keep it general and vague, focusing on company policy.&rdquo

Yelp also suggests that medical professionals privately contact reviewers about their concerns. Direct messaging to a business&rsquo reviewers is available to any merchant that lays claim to its business on Yelp at www.biz.yelp.com, which is free.

&ldquoIf there&rsquos a one-star review, we always contact the patient directly and see if we can work it out,&rdquo said Kaplan said. &ldquoYou don&rsquot want to give the wrong impression that you&rsquore just calling about a bad review, you want to convey that you want them to let you know directly when they have a problem.&rdquo

Still there are always malcontents, particularly drug-seeking individuals, who may ding doctors for not prescribing all the meds they want, he and others said.

Darnell Holloway, Yelp director of business outreach, said the site will remove reviews that violate its policies, but those are only the egregious ones: reviews that include hate speech, threats or harassment reviews that indicate a conflict of interest such as ones posted by competitors and reviews written by people who do not have direct experience with the provider.

San Francisco psychologist Megan Lehmer has a particularly tricky path. She works as a court-appointed child custody evaluator for divorcing parents who could not work out their own arrangements &mdash often cases involving child abuse, domestic violence or chemical dependency.

&ldquoWe&rsquore very vulnerable to bad Yelp reviews because (clients) are so high-conflict and so angry,&rdquo she said. &ldquoThe people who need child custody evaluations are often not nice people and certainly won&rsquot stop at using social media for making unfounded allegations.&rdquo

As a business owner, she will flag spurious reviews, but said Yelp&rsquos response varies: Sometimes it removes them, sometimes not. She, like many other medical professionals, said it&rsquos frustrating when she gets glowing reviews that Yelp hides.

Yelp said it handles its millions of reviews through automated software, which may classify reviews as &ldquonot recommended&rdquo if they&rsquore written by someone who rarely posts, or if multiple reviews of one provider come from the same IP address, for instance.

Yelp has come under fire for years from merchants who allege that the site promotes good reviews for companies that advertise with it, and conversely is slow to remove fake negative reviews for those that don&rsquot. Yelp says these accusations have no merit. &ldquoThere&rsquos no amount of money that anyone can pay Yelp to get a better rating on our site,&rdquo Holloway said.


Contents

Origins (2004–2009) Edit

Two former PayPal employees, Jeremy Stoppelman and Russel Simmons, founded Yelp at a business incubator, MRL Ventures, in 2004. [6] [7] Stoppelman and Simmons conceived the initial idea for Yelp as an email-based referral network, after Stoppelman caught the flu [8] and had a difficult time finding an online recommendation for a local doctor. [7] [9] [10] Max Levchin, the co-founders' former colleague as founding chief technology officer of PayPal and founder of MRL Ventures, provided $1 million in Angel financing. [11] [7] MRL co-founder David Galbraith, who instigated the local services project based on user reviews, came up with the name "Yelp". [12] Stoppelman explained that they decided on "Yelp" for the company's name because "it was short, memorable, easy to spell, and was familiar with 'the help' and 'yellow pages'". [13] [14]

According to Fortune, Yelp's initial email-based system was "convoluted". [7] The idea was rejected by investors and did not attract users beyond the cofounders' friends and family. [15] Usage data showed that users were not answering requests for referrals, but were using the "Real Reviews" feature, which allowed them to write reviews unsolicited. [7] According to The San Francisco Chronicle, "the site's popularity soared" after it was re-designed in late 2005. [16] Yelp raised $5 million in funding in 2005 from Bessemer Venture Partners and $10 million in November 2006 from Benchmark Capital. [7] The number of reviewers on the site grew from 12,000 in 2005, to 100,000 in 2006. [15] By the summer of 2006, the site had one million monthly visitors. [15] It raised $15 million in funding from DAG Ventures in February 2008. [17] [18] In 2010, Elevation Partners invested $100 million $75 million was spent on purchasing equity from employees and investors, while $25 million was invested in sales staff and expansion. [19] Yelp grew from 6 million monthly visitors in 2007 to 16.5 million in 2008 and from 12 to 24 cities during the same time period. By 2009, the site had 4.5 million reviews. [20] By 2010, Yelp's revenues were estimated to be $30 million and it employed 300 people. [15]

Private company (2009–2012) Edit

Yelp introduced a site for the United Kingdom in January 2009 [21] and one for Canada that August. [20] The first non-English Yelp site was introduced in France in 2010 users had the option to read and write content in French or English. [22] From 2010 to 2011, Yelp launched several more sites, in Austria, Germany, Spain, and the Netherlands. International website traffic doubled during the same time period. [23] An Australian website went live in November 2011. [6] It was supported through a partnership with Telstra, which provided one million initial business listings, [24] and was initially glitchy. [25] Yelp had a presence in 20 countries by the end of 2012, including Turkey [26] and Denmark. [27] Yelp's first site in Asia was introduced in September 2012 in Singapore, [8] which was followed by Japan in 2014. [28]

In December 2009, Google entered into negotiations with Yelp to acquire the company, [29] [30] but the two parties failed to reach an agreement. [31] [32] According to The New York Times, Google offered about $500 million, but the deal fell through after Yahoo offered $1 billion. [33] TechCrunch reported that Google refused to match Yahoo's offer. Both offers were later abandoned following a disagreement between Yelp's management and board of directors about the offers. [34] In June 2015, Yelp published a study alleging Google was altering search results to benefit its own online services. [35] [36]

Yelp began a service called Yelp Deals in April 2011, [37] but by August it cut back on Deals due to increased competition and market saturation. [38] That September, the Federal Trade Commission investigated Yelp's allegations that Google was using Yelp web content without authorization and that Google's search algorithms favored Google Places over similar services provided by Yelp. [39] [40] In a January 2014 agreement, Google was not subject to anti-trust litigation from the FTC, but did have to allow services like Yelp the ability to opt out of having their data scraped and used on Google's websites. [41]

Public entity (2012–present) Edit

Having filed for an initial public offering (IPO) with the Securities Exchange Commission in November 2011, [42] [43] [44] Yelp's stock began public trading on the New York Stock Exchange on March 2, 2012. [45] [46] [47] [48] [49] In 2012, Yelp acquired its largest European rival, Qype, for $50 million. [50] [8] The following year, CEO Jeremy Stoppelman reduced his salary to $1. [51] [52] Yelp acquired start-up online reservation company SeatMe for $12.7 million in cash and stock in 2013. [53] [54] [55] [56] Yelp's second quarter 2013 revenue of $55 million "exceeded expectations", but the company was not yet profitable. [57] [58]

In 2012/13, Yelp moved into its new corporate headquarters, occupying about 150,000 square feet on 12 floors of 140 New Montgomery (the former PacBell building) in San Francisco. [59]

The company was profitable for the first time in the second quarter of 2014, [57] as a result of increasing ad spending by business owners and possibly from changes in Google's local search algorithm. [60] It is dubbed as Google Pigeon, which helped authoritative local directory sites like Yelp and TripAdvisor, in getting more visibility. [61] Over the course of the year, Yelp websites were launched in Mexico, Japan, and Argentina. [62] Also in 2014, Yelp expanded in Europe through the acquisitions of German-based restaurant review site Restaurant-Kritik and French-based CityVox. [63] [64] [65]

In early February 2015, Yelp announced it was buying Eat24, an online food-ordering service, for $134 million. [66] [67] [68] Then in August 2017, Yelp sold Eat24 to Grubhub for $287.5 million. [69] [70] The acquisition resulted in a partnership to integrate Grubhub delivery into the Yelp profiles of restaurants. [71]

In late 2015, a "Public Services & Government" section was introduced to Yelp and the General Services Administration began encouraging government agencies to create and monitor official government pages. [72] For example, the Transportation Security Administration created official TSA Yelp pages. [73] [74] Later that year Yelp began experimenting in San Francisco with consumer alerts that were added to pages about restaurants with poor hygiene scores in government inspections. [75] Research conducted by the Boston Children's Hospital found that Yelp reviews with keywords associated with food poisoning correlates strongly with poor hygiene at the restaurant. Researchers at Columbia University used data from Yelp to identify three previously unreported restaurant-related food poisoning outbreaks. [76]

On November 2, 2016, concurrent with its earnings report for Q3 2016, Yelp announced it would drastically scale back its operations outside North America and halt international expansion. This resulted in the termination of essentially all international employees across Yelp's 30+ international markets from the sales, marketing, public relations, business outreach, and government relations departments. Overseas employees now primarily consist of engineering and product management staff. These layoffs affected only 175 individuals, or 4% of its total workforce. [77] [78] [79]

In April 2017, Yelp acquired Wi-Fi marketing company Turnstyle Analytics for $20 million. [80] [81] [82]

In early 2020, Yelp listed space at 55 Hawthorne Street, San Francisco, for 235 employees as available for sublease. [83] Business closures and stay-at-home orders during the COVID-19 pandemic in the United States caused a massive decline in searches on Yelp (down 64%-83% from March to April, depending on category) and company revenues. On April 9, the company announced it would lay off 1,000 employees, furlough about 1,100 with benefits, reduce hours for others, cut executive pay by 20-30%, and stop paying the CEO for the rest of 2020. [84]

Yelp's website, Yelp.com, is a crowd-sourced local business review and social networking site. [7] The site has pages devoted to individual locations, such as restaurants or schools, where Yelp users can submit a review of their products or services [86] using a one to five star rating scale. [15] Businesses can also update contact information, hours, and other basic listing information or add special deals. [15] [20] In addition to writing reviews, users can react to reviews, plan events, or discuss their personal lives. [7]

78% of businesses listed on the site had a rating of three stars or better, [87] but some negative reviews were very personal or extreme. [15] Some of the reviews are written in an entertaining or creative manner. [16] As of 2014, users could give a "thumbs-up" to reviews they liked, which caused these reviews to be featured more prominently in the system. [88] As of 2008, each day a "Review of the Day" was determined based on a vote by users. [89]

72% of Yelp searches are done from a mobile device. [87] The Yelp iPhone mobile app was introduced in December 2008. [90] [91] In August 2009, Yelp released an update to the iPhone app with a hidden Easter Egg augmented reality feature called Monocle, which allowed users looking through their iPhone camera to see Yelp data on businesses seen through the camera. [92] Check-in features were added in 2010. [93]

Yelp users can make restaurant reservations in Yelp through Yelp Reservations, a feature originally added in June 2010. [94] Yelp's reservation features have been done through SeatMe, which was acquired by Yelp in 2013. [53] Prior to that, Yelp had offered reservation services through OpenTable. [95] In 2013, features to have food ordered and delivered were added to Yelp [96] as well as the ability to view hygiene inspection scores [97] and make appointments at spas. [98] Yelp's content was integrated into Apple Inc.'s Siri "virtual assistant" and the mapping and directions app of Apple's September 2012 release of the iOS 6 computer operating system. [99] [100]

In March 2014, Yelp added features for ordering and scheduling manicures, flower deliveries, golf games, and legal consultations, among other things. [101] In October 2014, the company, working in collaboration with hotel search site Hipmunk, added features to book hotels through Yelp. [98] [63]

Yelp started a 7–10% cash back program at some US restaurants in 2016 through partnership with Empyr, a company that links credit card purchases to online advertising. [102] [103] [104]

On February 14, 2017, Yelp launched Yelp Questions and Answers, a feature for users to ask venue-specific questions about businesses. [105]

In June 2020, Yelp launched a COVID-19 section which enables businesses to update their health and safety measures as well as their service offering changes. [106] Since 2021 January, users can provide detailed feedback regarding whether or not and what health and safety measures the business has implemented through editing in the COVID-19 section on Yelp business pages. [107] [108]

Features for businesses Edit

Yelp added the ability for business owners to respond to reviews in 2008. [15] [109] Businesses can respond privately by messaging the reviewer or publicly on their profile page. In some cases, Yelp users that had a bad experience have updated their reviews more favorably due to the businesses' efforts to resolve their complaints. In some other cases, disputes between reviewers and business owners have led to harassment and physical altercations. [15] The system has led to criticisms that business owners can bribe reviewers with free food or discounts to increase their rating, though Yelp users say this rarely occurs. [89] A business owner can "claim" a profile, which allows them to respond to reviews and see traffic reports. [15] Businesses can also offer discounts to Yelp users that visit often using a Yelp "check in" feature. [93] [110] In 2014, Yelp released an app for business owners to respond to reviews and manage their profiles from a mobile device. [111] Business owners can also flag a review to be removed, if the review violates Yelp's content guidelines. [112]

Yelp's revenues primarily come from selling ads and sponsored listings to small businesses. [10] [15] Advertisers can pay to have their listing appear at the top of search results, or feature ads on the pages of their competitors. [15] [20] [109] In 2016, advertising revenue grew at a rate of 30% year over year. [113] Yelp will only allow businesses with at least a three-star rating to sign up for advertising. [16] Originally a sponsored "favorite review" could place a positive review above negative ones, [15] but Yelp stopped offering this option in 2010 in an effort to deter the valid criticism that advertisers were able to obtain a more positive review appearance in exchange for pay. [114] [115]

On June 5, 2020, Yelp launched a tool to allow businesses on the platform to identify themselves as black-owned, allowing customers to search for black-owned businesses they want to support. [116] [117] There were more than 2.5 million searches for Black-owned businesses on Yelp from May 25 to July 10. [118] Searches for Black-owned businesses were up 2,400% in 2020. [119]

A Harvard Business School study published in 2011 found that each "star" in a Yelp rating affected the business owner's sales by 5–9%. [120] [121] A 2012 study by two University of California, Berkeley economists found that an increase from 3.5 to 4 stars on Yelp resulted in a 19% increase in the chances of the restaurant being booked during peak hours. [122] A 2014 survey of 300 small business owners done by Yodle found that 78% were concerned about negative reviews. Also, 43% of respondents said they felt online reviews were unfair, because there is no verification that the review is written by a legitimate customer. [121]

Yelp has a complicated relationship with small businesses. [123] Criticism of Yelp continues to focus on the legitimacy of reviews, public statements of Yelp manipulating and blocking reviews in order to increase ad spending, as well as concerns regarding the privacy of reviewers.

Astroturfing Edit

As Yelp became more influential, the phenomenon of business owners and competitors writing fake reviews, known as "astroturfing", became more prevalent. [88] A study from Harvard Associate Professor Michael Luca and Georgios Zervas of Boston University analyzed 316,415 reviews in Boston and found that the percentage of fake reviews rose from 6% of the site's reviews in 2006 to 20% in 2014. [120] Yelp's own review filter identifies 25% of reviews as suspicious. [124]

Yelp has a proprietary algorithm that attempts to evaluate whether a review is authentic and filters out reviews that it believes are not based on a patron's actual personal experiences, as required by the site's Terms of Use. [15] [125] The review filter was first developed two weeks after the site was founded and the company saw their "first obviously fake reviews". [124] Filtered reviews are moved into a special area and not counted towards the businesses' star-rating. [124] The filter sometimes filters legitimate reviews, leading to complaints from business owners. [88] New York Attorney General Eric T. Schneiderman said Yelp has "the most aggressive" astroturfing filter out of the crowd-sourced websites it looked into. [124] Yelp has also been criticized for not disclosing how the filter works, [124] which it says would reveal information on how to defeat it. [15]

Yelp also conducts "sting operations" to uncover businesses writing their own reviews. [126] In October 2012, Yelp placed a 90-day "consumer alert" on 150 business listings believed to have paid for reviews. The alert read "We caught someone red-handed trying to buy reviews for this business". [127] [128] [129] In June 2013, Yelp filed a lawsuit against BuyYelpReview/AdBlaze for allegedly writing fake reviews for pay. [130] [131] In 2013, Yelp sued a lawyer it alleged was part of a group of law firms that exchanged Yelp reviews, saying that many of the firm's reviews originated from their own office. The lawyer said Yelp was trying to get revenge for his legal disputes and activism against Yelp. [123] An effort to win dismissal of the case was denied in December 2014. [132] In September 2013, Yelp cooperated with Operation Clean Turf, a sting operation by the New York Attorney General that uncovered 19 astroturfing operations. [124] In April 2017, a Norfolk, Massachusetts, jury awarded a jewelry store over $34,000 after it determined that its competitor's employee had filed a false negative Yelp review that knowingly caused emotional distress. [133]

Alleged unfair business practices Edit

Yelp has a complicated relationship with small businesses. [123] There have been allegations that Yelp has manipulated reviews based on participation in its advertising programs. [134] Many business owners have said that Yelp salespeople have offered to remove or suppress negative reviews if they purchase advertising. [88] [135] Others report seeing negative reviews featured prominently and positive reviews buried, and then soon afterwards, they would receive calls from Yelp attempting to sell paid advertising. [136]

Yelp staff acknowledged that they had allowed their advertising partners to move their favorite review to the top of the listings as a "featured review", but said the reviews were not otherwise manipulated to favor the partner businesses. [86] Such featured reviews were shown with a strip above them that said "One of [Insert Business Here]'s Favorite Reviews" and "This business is a Yelp sponsor." [86] The company also said it might have had some rogue salespeople that misrepresented their practices when selling advertising services. [86] In response to the criticism of their allowing their advertising partners to manipulate the review listing, Yelp ceased its "featured review" practice in 2010. [114]

Several lawsuits have been filed against Yelp accusing it of extorting businesses into buying advertising products. Each has been dismissed by a judge before reaching trial. [88] In February 2010, a class-action lawsuit was filed against Yelp alleging it asked a Long Beach veterinary hospital to pay $300 a month for advertising services that included the suppression or deletion of disparaging customer reviews. [137] The following month, nine additional businesses joined the class-action lawsuit, [138] and two similar lawsuits were filed. [139] That May the lawsuits were combined into one class-action lawsuit, [140] which was dismissed by San Francisco U.S. District Judge Edward Chen in 2011. Chen said the reviews were protected by the Communications Decency Act of 1996 and that there was no evidence of manipulation by Yelp. [141] The plaintiffs filed an appeal. [142] In September 2014, the United States Court of Appeals for the Ninth Circuit upheld the dismissal, finding that even if Yelp did manipulate reviews to favor advertisers, this would not fall under the court's legal definition of extortion. [143] [144] [145]

In August 2013, Yelp launched a series of town hall style meetings in 22 major American cities in an effort to address concerns among local business owners. Many attendees expressed frustration with seeing Yelp remove positive reviews after they declined to advertise, receiving reviews from users that never entered the establishment, and other issues. [142] [146] A 2011 "working paper" published by Harvard Business School from Harvard Associate Professor Michael Luca and Georgios Zervas of Boston University found that there was no significant statistical correlation between being a Yelp advertiser and having more favorable reviews. [121] [147] The Federal Trade Commission received 2,046 complaints about Yelp from 2008 to 2014, [121] most from small businesses regarding allegedly unfair or fake reviews or negative reviews that appear after declining to advertise. [148] According to Yelp, the Federal Trade Commission finished a second examination of Yelp's practices in 2015 and in both cases did not pursue an action against the company. [149] [150]

Journalist David Lazarus of the Los Angeles Times also criticized Yelp in 2014 for the practice of selling competitors' ads to run on top of business listings and then offering to have the ads removed as part of a paid feature. [151]

In 2015, San Francisco filmmaker Kaylie Milliken was reportedly producing a documentary film titled Billion Dollar Bully about Yelp's alleged business practices. [152]

In 2018, in the case Hassell v. Bird, the California Supreme Court held by a narrow 4-3 margin that a business cannot force Yelp to remove a review, even if the review is defamatory of the business. [153] [154]

A 2019 investigation by Vice News and the podcast Underunderstood found that in some cases, Yelp was replacing restaurant's direct phone numbers with numbers that routed through GrubHub, which would then charge restaurants for the calls under marketing agreements GrubHub has with restaurants. [155]

Political expression and politically motivated ratings Edit

Eater reported that between 2012 and 2015, a number of users who review restaurants on the site have posted reviews that contained comments about the political activities and political views of businesses and their owners or have submitted ratings affected by political motivations. The article found that in some instances, the Yelp review area for a business has become flooded with such review submissions after a business was involved in politically sensitive action. Yelp has removed reviews of this nature and has tried to suppress their submission. [156]

Litigation over review content Edit

According to data compiled in 2014 by the Wall Street Journal, Yelp receives about six subpoenas a month asking for the names of anonymous reviewers, mostly from business owners seeking litigation against those writing negative reviews. [121] In 2012, the Alexandria Circuit Court and the Virginia Court of Appeals [157] held Yelp in contempt for refusing to disclose the identities of seven reviewers who anonymously criticized a carpet-cleaning business. In 2014, Yelp appealed to the Virginia Supreme Court. [148] [158] A popular public argument in favor of Yelp at the time was that a ruling against Yelp would negatively affect free speech online. The judge from an early ruling said that if the reviewers did not actually use the businesses' services, their communications would be false claims not protected by free speech laws. [159] The Virginia Supreme Court ruled that Yelp, a non-resident company in the state of Virginia, could not be subpoenaed by a lower court. [160] Also in 2014, a California state law was enacted that prohibits businesses from using "disparagement clauses" in their contracts or terms of use that allow them to sue or fine customers that write negatively about them online. [161] [162]

Business Insider Investigation Edit

A 2020 Business Insider Investigation questioned the culture, ethics and practices within Yelp. [163] [164]

According to Inc. Magazine most reviewers (sometimes called "Yelpers" [16] ) are "well-intentioned" and write reviews in order to express themselves, improve their writing, or to be creative. In some cases, they write reviews in order to lash out at corporate interests or businesses they dislike. [15] Reviewers may also be motivated by badges and honors, such as being the first to review a new location, [16] or by praise and attention from other users. [109] Many reviews are written in an entertaining or creative manner. [16] Users can give a review a "thumbs-up" rating, which will cause it to be ranked higher in the review listings. [88] Each day a "Review of the Day" is determined based on a vote by users. [89] According to The Discourse of Online Consumer Reviews many Yelp reviewers are internet-savvy adults aged 18–25 or "suburban baby boomers". [165]

Reviewers are encouraged to use real names and photos. [165] Each year members of the Yelp community are invited or self-nominated to the "Yelp Elite Squad" and some are accepted based on an evaluation of the quality and frequency of their reviews. [166] [167] Members may nominate other reviewers for elite status. Users must use their real name and photo on Yelp to qualify for the Elite Squad. [89] To accept a nomination, members must not own a business. Elite Squad Yelpers are governed by a council and estimated to include several thousand members. Yelp does not disclose how the Yelp Elite are selected. [16] [166] Elite Squad members are given different color badges based on how long they've been an elite member. [167] The Yelp Elite Squad originated with parties Yelp began throwing for members in 2005, [167] and in 2006 it was formally codified [166] the name came from a joking reference to prolific reviewers that were invited to Yelp parties as the "Yelp Elite Squad"." [7] [15] Members are invited to special opening parties, given gifts, and receive other perks. [7] [167] As of 2017, there are over 80 local Elite Squads in North America. [166]

As of 2017, Yelp employed a staff of over 80 community managers that organize parties for prolific reviewers, send encouraging messages to reviewers, and host classes for small business owners. [15] Yelp reviewers are not required to disclose their identity, but Yelp encourages them to do so. [7]


10 things online reviewers won’t say

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1. “Trust in us may be misplaced.”

Which juicer makes the smallest mess, and what hairstylist does the best blowouts? Consumers increasingly look to online reviews to help them decide what to buy and where.

In December, visits to the popular local-business review site Yelp.com were up 15%, year-over-year, according to Web traffic analysis site Compete.com. Similarly, travel review site TripAdvisor.com saw an 8% increase in visitors, and traffic to local-services review site Angie’s List jumped a whopping 80%. What’s behind the rising demand? In a 2012 report from market research firm Nielsen, 70% of consumers said they trust online reviews, a 15% increase from 2009. That means online reviews are second only to personal recommendations from family and friends as the most trusted source of buying advice, researchers say.

But as many as 30% of online reviews are fake, estimates Bing Liu, a professor of computer science at the University of Illinois at Chicago who researches customer reviews. Businesses and manufacturers can easily find people online who are willing to write reviews for just a few bucks without ever using the product or service in question, says Jack Vonder Heide, chief executive of research group Technology Briefing Centers. On Amazon Mechanical Turk, a task-for-hire marketplace on Amazon.com, one listing soliciting a 50-word review of an undisclosed local service offers payment of 50 cents. A would-be writer’s listing on task site Fiverr.com — which has a section devoted to reviews for money — promises two 250-word write-ups for $5, and offers to use pseudonyms “to make the reviews seem like they are from real customers.” An Amazon spokeswoman says such listings are not permitted. “If we find a task that is offering paid reviews, we will remove the task,” she says. Fiverr.com did not respond to requests for comment.

Review sites concede that fakes are a problem, but say they each have systems in place for picking out suspicious write-ups, from automated filters to special investigation teams. Still, systems aren’t foolproof, so it’s on the consumer to read between the lines. Some clues: Very brief reviews without much detail beyond a basic opinion tend to be fake, says Vonder Heide. “If it’s loaded with technical specifications, almost like it’s coming out of a brochure or marketing copy, that’s another red flag,” he says. Some sites also restrict reviews to known customers: Booking site Expedia.com, for example, only allows reviews for travel completed through the site, while subscription-based Angie’s List requires users to use their real names, which it says it verifies.

2. “We have skin in the game.”

In another kind of fake review, the reviewer is very familiar with the product or service. It’s not unusual to see a business owner and their employees, friends and family members post under false identities, says Vonder Heide. (Users call the accounts “sock puppets.”) That usually results in a glowingly positive review, but can also surface as a bad review to “stick the knife” in a competitor, he says. It’s no surprise why — a 2011 Harvard University study found that a one-star-better difference on Yelp.com accounts for an extra 5% to 9% in sales for an independent restaurant. Study author Michael Luca, an assistant professor at Harvard Business School, says results would likely be similar in other industries. Review sites’ policies typically allow owners to respond to reviews, but prohibit business owners and affiliates from reviewing themselves or soliciting others to do so.

Sock-puppet fakes are easy for site users to spot, says regular Yelp reviewer Jesse Dawson, a costume designer in Las Vegas. “You’ll see a business that has suddenly gotten its first review, and it’s five stars, gushing about it, with some offer of a coupon or extras,” he says. Unlike reviewers who earn income posting scores of fake reviews (for a wide range of products and services), reviewers who have skin in the game aren’t likely to post many reviews, beyond those that benefit their business. To avoid getting caught out by site moderators, they don’t flesh out their profile with a picture or personal details. And often, the fake reviews are posted at suspicious times, Dawson says, like just before a business’s grand opening, or immediately after a competitor gets publicity.

Users are warned not to review a business if they are connected to the employer or employees, says Darnell Holloway, Yelp’s manager of local business outreach. Some sites even impose penalties on business owners, beyond removing suspect reviews. A TripAdvisor spokeswoman says penalties can include a lower position on the site’s popularity index, ineligibility for awards and lists, and red “penalty notices” on the business page alerting travelers to suspicious reviews.

3. “Venting online is a good way to wind up in court.”

General contractor Christopher Dietz, the owner of Dietz Development in Washington, D.C., is suing former client Jane Perez for $750,000, alleging she damaged his reputation. According to the complaint: In reviews posted on Angie’s List and Yelp, Perez alleged that Dietz damaged her property, trespassed and may have stolen jewelry. The suit says the reviews also stated that Dietz had received sanctions from state agencies and had been sued by another client. “She can say I’m a crappy contractor she’s allowed to say that,” says Dietz. But he contends that Perez’s accusations go beyond statements of opinion and are untrue. Paul Alan Levy, an attorney with the Public Citizen Litigation Group who is representing Perez, says his client stands behind her review: “She believes that everything she says is true.” A December court order required Perez to modify her posts later that month, the Supreme Court of Virginia reversed that decision. The lawsuit is currently pending. “I am now on year two and lawsuit number two of dealing with this business over a project that was to take three to four days,” says Perez. “Meanwhile, I already have $14,000 in legal bills over a $9,000 project.”

Business owners haven’t been shy about taking legal action against the writers of negative online reviews — in part because the Communications Decency Act prevents them from going after the review site, says attorney David Wachen, a partner with Washington, D.C., firm Shulman, Rogers, Gandal, Pordy & Ecker. (For more instances, see Commenting online? Call a lawyer.) “What you need to be very careful about is, opinion is protected by the First Amendment, but false statements of fact are not,” he says. Reviewers should consider their wording carefully before posting the Public Citizen Litigation Group publishes a guide to writing with libel in mind. Don’t assume posting anonymously will shield you, either. “Sometimes people have a false sense of security, if they’re sitting in their pajamas writing nasty things about people under a pseudonym, that no one is going to figure out who they are,” Wachen says. “While it can be challenging, it’s not impossible to track you down.” See citizen.org’s Writing with Libel in Mind: a Guide for Non-Profits and Bloggers

Some states have so-called anti-Slapp (strategic lawsuits against public participation) statutes that make it tougher for businesses to pursue defamation claims. But even protected speech or an anti-Slapp statute doesn’t prevent someone from suing — it just means they’re less likely to do so successfully, Wachen says. That can still be a very expensive legal battle. Prolific reviewers should examine the liability portion of their homeowners’ or renters’ insurance, to be sure it covers defamation claims, says Levy. If it doesn’t, he says, they might consider purchasing an umbrella policy that will.

4. “Five stars does not a stellar product make.”

When everything’s super, nothing is. Yet a 2008 University of Illinois at Chicago analysis found that 60% of reviews across Amazon.com awarded products five stars. Another 20% of reviews awarded four stars. TripAdvisor says its average rating for hotels is currently four out of five, and as of August 2011, according to Yelp, 39% of its site reviews gave five stars and 28% gave four stars. Liu, the UIC professor who conducted the Amazon analysis, says the trend runs counter to expectations: “Most people say that if they have a good functioning product, they are not likely to write a positive review,” he says. “It is only when they have a bad product, they are more likely to write a review to complain.” Prevalent fake and solicited reviews probably contribute to the higher ratings, he says, especially since the number of negative reviews is small relative to the number of customers. (The sites say that their policies and processes catch the bulk of fakes.) Shoppers are also more likely to give feedback on purchases they get excited about, which is often why they’re buying in the first place, says Brad Williams, president of public relations firm Weber Shandwick’s North American technology practice, which has studied consumer reviews. “It’s easier to get reviews about a tablet computer than a humidifier,” he says. That enthusiasm can spur more ratings, which in turn fuel more purchases, creating a perpetual loop.

It’s not uncommon for reviewers to have a little fun, either. Case in point: the four-star rating for a gallon of Tuscan Whole Milk at Amazon. The 1,427 reviews — a little more than half the number the $69 Kindle has garnered — include jokes, poems and other odes to its apparent greatness. “This is milk deserving of something better than a Flintstones plastic tumbler,” wrote a commenter in 2006, whose appraisal, complete with glass swirling and tasting notes, is still ranked as the second “most helpful” review. And the raves are still coming. In February, another reviewer left a haiku along with her five-star rating. (Negative reviews mostly focus on issues of lactose intolerance, rather than quality. “Poison,” writes one such critic.)

Some sites say the reason there are so many high ratings is because consumers read so many reviews before making a decision. “Consumers generally come to us at the beginning of a project to find good help,” says a spokeswoman for Angie’s List. “They hire companies that have already earned good ratings from other members, so they generally have good experiences, so that’s what they report on later.” Faced with a choice among several high-rated goods or services, review details come in handy: They can help consumers discern whether your five-star expectations jibe with what previous customers experienced, says Luca, or if they fall short. It can also be worth looking to see how many contributions come from the review site’s top reviewers — a distinction usually reserved for those who regularly contribute write-ups the community has found useful. For example, Elite Yelp reviewers tend to have more “accurate” ratings, says Luca, reflecting where a business’s average is likely to fall over the long term.

5. “Variants may be silenced.”

Getting the full measure of a business may require some digging beyond its main review page. Alex & Company Jewelry in Newton, Mass., for instance, shows up on Yelp with a 2.5-star rating, thanks to three one-star reviews among the five posted. In the “About This Business” section near the bottom of the page, however, there’s a single line in parenthesis that reads “(27 Filtered)”. Yelp visitors who think to click on that hyperlinked text, enter the two code words displayed on the screen and click to confirm their choice can read another 27 reviews — all but one of them with five stars. If those were factored in, the store could have a 4.5-star rating. “These are not made up stories,” says Alex Zamsky, owner of Alex & Company Jewelry. “These are my customers.” According to Yelp’s Holloway, the site uses filtering software to automatically remove reviews that violate its terms of service and content guidelines, including those that seem biased or fraudulent. He says sometimes even legit reviews are filtered out for quality control. “Legitimate reviews — even the ones from your favorite customers — aren’t always as helpful as others, so there is no guarantee that they are going to be showcased,” he says. “Keep in mind that Yelp isn’t a drive-by testimonial site.”

What gives? Sites weigh individual consumer experiences differently in their ratings formulas. At the Better Business Bureau, a business with one unresolved consumer complaint could have an F rating in the letter-grade system, while a competitor with 600 resolved complaints might still earn an A rating, says Dennis Garrett, an associate professor of marketing at Marquette University, and board member of the Wisconsin Better Business Bureau. Katherine Hutt, a spokeswoman for the national Better Business Bureau, says the system reflects the organization’s emphasis on encouraging businesses and customers to work together to resolve issues. “Businesses that ignore complaints cannot maintain a good grade with us,” she says. Epinions.com users have the ability to rate reviews as “Not Helpful,” or “Don’t Show,” which can render some posts unviewable to users who aren’t logged in, says a spokesman. Yelp estimates 80% of users reviews are showcased, with the remaining 20% filtered.

Review filters aren’t all bad — they are often sites’ first line of defense in limiting fake and biased reviews that might lead to a bad purchase decision. But experts say consumers may find better data looking at the review details rather than the overall rating. “I always tell consumers, drill deeper,” says Garrett. Consider the total number and nature of reviews, rather than relying on the overall rating displayed. That may not factor in a recent improvement or decline in service, he says, or a trend in problems reported.

6. “The discount made us love it.”

Special treatment can influence some reviewers to be more positive, or write a review. In a 2011 Cornell University survey of 166 Amazon “top 1,000” reviewers, 85% had received free products from manufacturers and publishers — and 78% said they often or always posted a review of such products (88% said their reviews were often or always positive).

Federal Trade Commission regulations require reviewers to disclose any freebies or payments received for writing a review, says a spokeswoman. But there’s no fine or penalty for consumer violators — the agency focuses more on whether marketers are telling customers to reveal the connection, she says. Site policies typically allow merchants to suggest that customers write reviews, but prohibit them from offering incentives or discounts. Most also encourage reviewers to disclose any factors that might have influenced a review. According to Yelp’s guidelines, users shouldn’t accept freebies in exchange for their review however, “if you independently luck into a free drink or two because of your charming personality, by all means, enjoy the largesse, but don’t forget to mention the free perks when writing your review.” An Amazon spokeswoman says companies can offer a free product up front through the Amazon Vine program, but must allow for both positive and negative reviews. The write-ups note that a review product was received. Other forms of compensation are not permitted, she says.

7. “Reading reviews compromises your objectivity.”

Being satisfied with a purchase may have as much to do with checking product or business reviews as picking the right product or business. Positive or negative reviews can flavor consumers’ experiences after reading them, says Luca. “You’re told this is good therefore, you think it’s good,” he says. A 2013 study from Weber Shandwick found that, as a result of consumer reviews, 65% of shoppers picked a brand they weren’t already considering.

That can mean you aren’t getting your money’s worth, if the resort or restaurant is really just so-so. But there can also be an upside to going in with a set impression, says Kit Yarrow, a professor of psychology and marketing at Golden Gate University in San Francisco. “People don’t always trust their own assessments,” she says, so knowing the negatives that other reviewers have found can help consumers take action earlier if it turns out that, yes, the vacuum is making a funny noise. Your attitude going into a transaction can also affect the way you act and the way the service provider responds — you may just get a better experience because you’re being nicer, she says.

But there are limitations to the influence. Luca says businesses often see more negative reviews after they run a half-priced daily-deal voucher, because the experience may not live up to the prior positive reviews. And Yarrow points out, glowing reviews aren’t likely to sway consumers with markedly different preferences or interests.

8. “Our opinions are priceless.”

Hoang Uyen Nguyen of Lauderdale, Minn., isn’t a regular review writer. “I’m a busy person,” she says. But when she gets a post-purchase email from a retailer asking her to review the item in question, she usually does. “I try to acknowledge good products because a lot of times, I feel like people just write reviews if they’re unhappy,” she says. And she’s not alone: although studies have found that emailed requests for feedback have low response rates, they still snag a few shoppers. Plenty of retailers send out similar reminders for feedback, hoping to boost review numbers and ratings that can be used in ads and sold to partners for reposting, says Vonder Heide. Epinions, for example, allows paying partners like price-comparison portals to show “snippets” of reviews, says a spokesman. TripAdvisor says it makes money licensing out content to properties and tourism groups. A body of negative or positive reviews can sometimes motivate local businesses to buy ads or to pay for prime placement on review sites, says Vonder Heide. In the fourth quarter of 2012, Angie’s List had $132.6 million in revenue from service providers who bought ads or other site services, up 80% from the previous year.

Sites including Epinions, Urbanspoon, Citysearch and Insider Pages say consumers retain the rights to their review, meaning they can change or remove their comments at any time. But while the review stands, there’s little people can do to keep part of their review from showing up on the business’s website or a shopping portal as the review site allows, Vonder Heide says. Amazon’s spokeswoman says display advertisers can share “praise from satisfied customers while also clearly showing the overall product rating and total review count.”

9. “Fake reviews are sometimes better than no reviews.”

Despite all the policies and procedures in place to weed out fake reviews, for retailers that allow on-site product ratings, fakes aren’t so bad, says Liu. “For them, positive reviews mean good business,” he says. Shoppers comparing options are more likely to buy a product that has a few positive reviews than one that has no reviews at all. And they may opt to buy elsewhere if none of the products have been reviewed. A 2012 study from social media marketer Bazaarvoice found that 84% of millenials and 70% of boomers say consumer reviews and other user-generated content influence what they decide to buy. “Without consumer input, millenials don’t buy — almost anything,” the researchers wrote.

Independent review sites like Yelp, Angie’s List and TripAdvisor have more incentive to hunt down fakes than retailers do, says Liu. “They want their sites to be trustworthy,” he says. To be sure, the filters on many sites are designed to block fakes precisely because ferreting them out after the fact can be onerous. Cornell University researchers developed an algorithm that, according to their 2011 report, can detect fakes 90% of the time of the three human judges they tested it against, the most accurate scored a 62% accuracy rate. Many sites say they have teams dedicated to reviewing the reviewers for problems, but it’s still a full time job. TripAdvisor’s resolution team, for instance, is on the job “24 hours a day, 365 days a year, making sure our reviews are real,” says a spokeswoman.

10. “Business owners may be moderating our conversation.”

When you’re hunting for a pizza place or pet groomer, expect business that paid for preferential listing to show up at the top of the list. Businesses can take control of their page for free on most sites, a move that allows them to respond to consumers’ reviews and add more details about a business. But paid advertisers can get preferred billing, with their listings showing up first on Web and mobile searches. (Sites say ads are easily identifiable, and that consumers can sort reviews by rating, proximity and other factors to easily navigate.)


Yelp Los Angeles

Nine small businesses have joined a California veterinarian's lawsuit that accuses the online review site Yelp of extortion, alleging that the site's sales team demanded payment to hide negative reviews.

The new plaintiffs were added last month to the punitive class action, originally filed on Feb. 23 in Santa Ana, Calif. The 39-page amended complaint shows that a cruise line, appliance repair company, bakery, pet grooming service and furniture store, are among the businesses that have signed on as class representatives. In addition to the extortion charge, the lawsuit accuses Yelp of fraudulent and unfair business practices.

Jeremy Stoppelman and Russel Simmons, with backgrounds in computer engineering and computer science, founded Yelp in 2004. Based in San Francisco, the online cityguide has been bashed by those who believe that sales representatives within the company manipulate reviews based on whether businesses advertise with them.

Yelp lawyers have not yet filed a response to the lawsuit though company officials have repeatedly denied any culpability in the case. A scheduling conference is set for April 26 in United States District Court, Central District of California.

Attorney Elizabeth Lee Beck, whose California law firm represents the plaintiffs, says future amendments to the lawsuit likely will be necessary as more businesses seek to be included in the action.

"We've been contacted by every type of business that you can imagine, all across the country," she says. "We've been certainly contacted by a number of veterinarians, doctors and dentists, just to name a few from the medical profession."

The lawsuit began with Dr. Greg Perrault, a veterinarian who owns Cats & Dogs Animal Hospital in Long Beach, Calif. He alleges that a Yelp sales representative repeatedly offered to rearrange negative reviews of the hospital so that they appeared lower on the site's listing page, effectively hiding them from the public, in exchange for the purchase of a $300-a-month advertising subscription.

In an interview with the VIN News Service, Perrault insists that this is not a case of "sour grapes" concerning the nature of his reviews. Cats & Dogs Animal Hospital earns four stars out of a possible five on Yelp.

Rather, Perrault says he contacted the company concerning a questionable review, which triggered a salesman to solicit his practice repeatedly. That's when he was pitched an "unethical" advertising arrangement, he contends.

"I was told that with money, I could hide negative reviews and so forth," Perrault says. "I never asked to be on Yelp, I never paid for anything, and yes, I'm getting some referrals. But this system is unethical. (As business owners) we're half of the equation. We should have a voice in how this works and should be changed."

Stephanie Ichinose, Yelp's director of communications, explains the system this way:

Yelp users write reviews and post them to the site. Yelp does not verify the authenticity of reviewers but attempts to present the most useful and helpful reviews from engaged community members, many of whom have complete profiles and are frequent Yelp users.

Thirty million people visit the site monthly, making Yelp high-stakes publicity for businesses in the 35 major markets where the site is anchored. With that kind of leverage has emerged users who try to game the system by posting glowing reviews to promote businesses, usually for a fee. It's a practice known as shilling, Ichinose says.

To combat shilling, Yelp employs a custom review filter to look for patterns of abuse. While Ichinose would not detail the filter's recipe for catching phony reviews, she explained that it's built on algorithms in the software.

With that, reviews -- both positive and negative -- are suppressed from time-to-time, based somewhat on how active, or "trustworthy," the reviewer appears.

"Yelp isn't a place where you can come in and throw up a review and expect it to remain. That doesn't foster a sense of community," Ichinose says. "We're trying to return the most helpful reviews for this business. Yelp is word-of-mouth in digital form, and we're weighting voices. We want folks engaged in this process."

Shilling is not an easy problem to solve, Ichinose admits. So she understands how business owners might be confused by the system: "Say you had 10 five-star reviews. Then a couple weeks later, you get a call from someone at Yelp to advertise. You come back, and six of the reviews have been suppressed by the filter and you only have four reviews still standing. The confluence of these independent events can be very confusing if you don't know about the filter."

Yelp advertisers receive a photo slide show, the ability to call out one favorite review on their profile page and feature rotating ads on competitors' pages. Yelp does not allow advertisers or non-advertisers to manipulate the order of reviews, Ichinose says.

"We don't know when reviews will come up or go down. We can't manage the order of the content," she insists.

The company also has stepped up efforts to get businesses involved in Yelp processes by hosting Webinars and how-to meetings to guide them on ways to respond to reviewers.

Despite those efforts, Perrault wants Yelp's business model to change. Rather than having businesses pay to advertise so that readers can use the site for free, he wants it to operate more like Consumer Reports, which employs the more traditional subscription-based system.

"There are other companies that do exactly what Yelp is doing, but their way of making money is different. I think the Yelp system is unethical," he says.


Court Says Yelp Is Allowed to Manipulate Ratings - Recipes

Hi Reddit. Jeremy, Yelp CEO here. This and a handful of other headlines covering Yelp's victory in the 9th circuit this week have been incredibly misleading.

There has never been (nor will there ever be) any amount of money a business can pay to change its rating or review on Yelp. To quote from our Advertiser FAQ page:

An independent academic study (not commissioned or paid for by Yelp) found that advertising plays no role in how reviews are recommended on Yelp. Or as this in-depth profile of Yelp in BuzzFeed puts it: “Harvard Business School professor Michael Luca has co-authored a new study that effectively debunks the extortion theory.”

Conspiracy theorists have had their day in court on more than one occasion, but courts have repeatedly dismissed their lawsuits claiming that ratings and reviews on Yelp are somehow tied to advertising.

If advertisers could control their reviews, then you’d expect them all to have perfect 5-star ratings on Yelp. Spoiler alert: They don’t. To test this, do a few searches in broad categories in your area - maybe for a dentist, mattress, or locksmith. You’ll find ads for businesses with all sorts of star ratings. Conversely, you’ll find thousands of businesses in organic results with great ratings that don’t pay Yelp a dime, and we’re fine with that.


This Woman's Facebook Post Ended Up Costing Her $500K

With the ease of sharing and commenting on social media, it's not hard to mindlessly make a statement without thinking. Let this woman's story be warning that there can be some serious repercussions.

After posting just one sentence about a former co-worker on Facebook &mdash a post that didn't even mention the woman by name &mdash a North Carolina woman has to pay $500,000 to settle a defamation lawsuit.

A few years back, Jacqueline Hammond posted "I didn't get drunk and kill my kid," in reference to her former colleague, Davyne Dial. According to the complaint, this comment was in reference to Dial's son who had died in a gun accident involving another child in 1976. Because Dial was not drunk when the accident occurred nor was she responsible for her son's death, she could sue Hammond for libel &mdash a written statement that is slanderous &mdash for her post online. "You can get in trouble anytime you make a false statement about someone else that damages their character or reputation," Charlotte attorney Missy Owen told WCNC.

After a two-years, the lawsuit was settle and Hammond owes Dial a whopping $250,000 for actual damages &mdash a.k.a. the emotional distress and defamation &mdash and another $250,000 for punitive damages.

Hammond's misfortune is a lesson to all to take a step back and think before you post. What you say could come back to haunt you.


What’s the penalty for violating the Consumer Review Fairness Act?

Congress gave enforcement authority to the Federal Trade Commission and the state Attorneys General. The law specifies that a violation of the CRFA will be treated the same as violating an FTC rule defining an unfair or deceptive act or practice. This means that your company could be subject to financial penalties, as well as a federal court order.

To make sure your company is complying with the Consumer Review Fairness Act:

  • Review your form contracts, including online terms and conditions and
  • Remove any provision that restricts people from sharing their honest reviews, penalizes those who do, or claims copyright over peoples’ reviews (even if you’ve never tried to enforce it or have no intention of enforcing it).

The wisest policy: Let people speak honestly about your products and their experience with your company.


Watch the video: Urteil des BGH: Yelp darf Bewertungen aussortieren


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