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2010 has not been a kind year so far to Yelp. The popular customer reviews website is now facing not one, not two, but three separate lawsuits which essentially allege that the company has built a business by extorting local businesses.

They claim that, in an effort to turn listed businesses into paying advertisers, Yelp salespeople have offered to remove bad reviews, and that they've also removed good reviews when businesses turn down advertising solicitations. Not surprisingly, Yelp has vigorously denied the charges leveled against it. And it's not waiting for a court date to make the case that it's innocent.

Yelp's CEO, Jeremy Stoppelman, has published several posts on the Yelp blog answering some of the lawsuit claims, and now Yelp has hired a production studio to produce a ~3 minute video explaining how Yelp works, and in particular, how it filters the reviews that are submitted by its users.

The video explains that reviews are filtered, the reviews that are displayed on a business' Yelp page are constantly changing based on a variety of variables (such as user trustworthiness) even though they're always available on the reviewer's Yelp profile, and that the innermost workings of the Yelp filter can't be publicly detailed because, as with, say, Google, doing so would simply make it easier for shills and scammers to game the system.

It's easy to sympathize with Yelp when it comes to the difficulty in explaining the technology of filtering. It's unclear how many of the plaintiffs suing Yelp (and their attorneys) truly understand that Yelp has a filtering system in place and that the reviews displayed on their businesses' Yelp pages are not static. It's certainly plausible that some of the plaintiffs alleging that positive reviews were removed after they refused to purchase advertising were removed as part of Yelp's normally filtering but simply made the obvious assumption that the removals were some form of retaliation.

Unfortunately for Yelp, it can fight lawsuits in the court of public opinion, but it can't win them there. The allegations that have been made against Yelp are serious, and they involve more than just Yelp's filtering. Yelp, for instance, will be forced to defend its sales practices, which also factor heavily in the complaints.

What I think is most interesting about Yelp going on the offense to defend itself is that it should have gone on the offense a lot sooner. More than a few business owners have complained about Yelp over the years, and there has been talk of lawsuits before. Frankly, it's somewhat surprising that it took so long for lawsuits to be filed. Yelp may not have been able to avoid them, but in my opinion, it would have done itself a favor by making a better effort to explain its filtering system earlier, considering making changes to how reviews are displayed to eliminate the appearance that reviews just disappear, and reevaluating when and how its salespeople approach business owners.

Notwithstanding all of these things, I also think it's worth considering the primary challenge that Yelp faces as a standalone customer reviews website: the businesses it is trying to sell advertising to are the same businesses Yelp users may be fairly or unfairly criticizing. That puts Yelp in a sticky situation; at the same moment, its own business interests could be opposed to the interests of the businesses it courts as advertisers and the users who trust it to remain impartial.

If Yelp learns anything from these lawsuits, it may be that building a popular customer reviews website is easy, but turning it into a long-term business is a lot harder.

Photo credit: InternetDefamationBlog.

Patricio Robles

Published 19 March, 2010 by Patricio Robles

Patricio Robles is a tech reporter at Econsultancy. Follow him on Twitter.

2379 more posts from this author

Comments (10)

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Gregory (@piplzchoice)

Completely agree with you on both points. The inertia with which companies react to the treats to their reputation is astonishing. It is like they hope the problems would go away on it's own. Burt their business model IS deeply flawed - It is very hard to claim being "unbiased" when your livelihood depends on "generosity" of reviewed.

over 6 years ago

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Vincent Roman

This makes me wonder about other such sites like Qype. This kind of thing puts them in exactly the same position, and they will have to watch out. I know from my own experience of how user-generated content causes major headaches from my time at last.fm and the solutions aren't always clear to end users. If anything this teaches us that the model fro generating revenue on review sites is less likely advertising and more marketing to the user base in a pro-active and insistent fashion. Seems to me there is little point in trying to monetise an old model, they might as well think of new and inventive ways which can ultimately add value and service.

over 6 years ago

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Mr smile

I was checking my reviews on yelp from the place I work. I never felt such a tremendous headache after I read a Comment from somebody who I don't really know, she was saying that I made many mistakes on her order and that is a lie, I don't know know how a country lik this one approves such a stupid sites where nobody uses them just for complaining or insult others. If a customer doesn't like something, cooooomoooo'n don't come back fucker. but they don't come back and then goes to this shitty web site to post their complain...OMG that comment almost cost me my Job. I hate Yelp, Fuck you whoever creates this website.

over 6 years ago

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John

Mr. Smile sounds like he needs to sit the next few out.. Maybe get that tantrum under control... and perhaps pick up some basic literacy while he's at it. 

almost 6 years ago

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Legitimate Business Owner.

I own a legitimate business and have been wrestling with Yelp for years.  I never asked to be on Yelp. I was submitted to Yelp by a women who is mentally ill who attacked me on other sites as well.

Community residents forced the mentally ill women to take down the false review on Yelp, but ever since I have been having real problems with the ethical practices of Yelp.

Following are some of the issues:

I have 6 reviews on Yelp, five are real and one is false.  Lets start with the false review.  The review is ranked 3 stars and was written by a Yelp Rep - how do I know ?  When I read and took a good at the page of the reviewer I notice some material on his page that's also on a page of the official Yelp site.  You would have to be associated with Yelp for this to happen. This reviewer seems to spend all his time traveling around reviewing businesses, when do you work, or are you working for Yelp.  This reviewer has an awful lot of first reviews as well.

All but four of my remaining real positive reviews on Yelp have been filtered - this is crooked - the talk about filtering systems is nonsense.  If you can't get it right then do do it at all.  You are having a negative impact on the businesses of hard working people - stop acting unethically to generate revenue for Yelp.  They use big words to describe their filtering system as a rouge to confuse the public.  It's all really transparent when you take a good like at filtered reviews and the Yelp client.

Yelp won't remove my page because they use it as a platform for their sponsors. 

Yelp at this very moment has place my competitor at the bottom of my Yelp page as a sponsored link - my competitor pays them for that.  Yelp basically uses my companies Yelp page as a platform for their paid sponsors.

Yelp has called me a few times and every time I tell them that I want to be taken off the Yelp site.  I also have written many times asking to be removed from Yelp.  I feel trapped with no way out because of internet rules.  Laws need to be passed that protect small businesses from pirates like Yelp.

over 5 years ago

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Silver Surfer

Date: 2010-12-06, 10:05PM PST


They put "honest reviews" in the filters.

I had an account and wrote a few reviews, they were filtered so I stopped using it.

Forgot about first account, opened another. Started writing reviews....

Figured how to get around the filter. Put a picture in your profile, does not have to be you. Also write 10+ reviews, make sure at least a few are 5 stars. Much like CL, even if telling the truth, the flag nazi's will try to shut you down.

Posted on the threads, found people were petty and mean. Called me a "troll"-I made another account. Made up "funny" threads which offended the flaggits-wrote about Thads even though I had never been there. Had 70+ friends, all laughs, didn't think people were taking it serious. Got put in Talk Jail. (couldn't post in threads.)

My "serious" posts from the "serious" account got attacked by a maniac who would bend the truth to fit his political agenda. My comments and reviews got flagged. Got a message from the Yelp HQ that I had violated the TOS and my accounts were banned. hahahaha. They took down all the "free" content I gave 'em.

I guess it was against the rules to have more than 1 account......

Anyways I found out more about their devious ways of working by going against the grain than by following the rules.

Made another account and my IP address got banned-hahaha little good that did, first, ever hear of an anonymizer?

Second, I have a dynamic IP that changes every few days......

So, if you do use Yelp, realize that most of the reviews are sugar coated and the honst ones get filtered.

Now, if you must post and don't want to be filtered, as stated above, write 10+ reviews. Also have a pic on your profile. Avoid the talk threads-losers.

If you have multiple accounts, access them via an anonymizer or one only at a work location, another at home and the third at a different location or on your phone, don' criss cross.

These are the things THEY don't want you to know so cutt and paste, cutt and paste.

Pissing of one Yelp IT person at a time.

  • Location: how to get around the BS
  • it's NOT ok to contact this poster with services or other commercial interests

over 5 years ago

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Ronnie

I am not a businessowner, just a person who likes to review restaurants I've been to, and despite having more than 10 reviews and a photo, all of my reviews have remained filtered.  I don't believe that they will ever be unfiltered, either.  My ratings have run the gamut from one star to 5 stars, so it's not like you can blame it on any kind of pattern in my ratings.  There's something suspicious about a company that filters reviews.  I don't get it.  I wouldn't trust any rating I see on that site if it doesn't factor in all or most of the reviews written, but I see establishments with more than half the reviews filtered.  They are full of crap about doing it to protect the site from fake reviews.  Fake reviews are usually obvious to spot but I see heartfelt, detailed reviews from people like me being filtered most of the time.  I knew that there had to be some controversy going on when I saw the "video" they posted to "explain" their filtering process.  Methinks they protest too much.  It's no wonder businesses have slapped lawsuits on them!  I'm done with Yelp.

over 5 years ago

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Mark

Yelp’s Model is seriously flawed. Recently a competitor had a family member of theirs write a negative comment on our new business. We know this because we hired one of our competitors employees after they left the company. She was able to recognize the posters name on yelp. This negative comment was written by a non customer of ours as well as a positive commenter on our competitors site. When we went through the process of review for the comment, yelp states that they verified the “review” as factual. ? . we followed up with yelp to no avail. They no longer respond. So now it requires me to escalate this to the court system as those before and currently are doing. We will let the rule of law proceed to the non customer who essentially is slandering us on yelp as well as Yelp whom states they have verified the review as factual and thus facilitating slander. I am amazed, but will state my case and let sounder minds decide.

over 5 years ago

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Zany cakes

Yelp has just come to the uk, I'm absolutely shocked at how these people work.
I have had 4 reviews, 1 of which was absolute lies, never seen or met this person before, and she claims that she had bought a cupcake from me. I spotted her last week, with one of my competitors ( kooky bakes) trying to hide her self as I have walked past. ( what a b****)
It's so sad that people will stoop to such levels to destroy another persons business for there own personal gain!
I'm up for constructive criticism, but not low life scum behaviour, malice and deception.

All my good reviews have been filtered and this crazy ladies ( Debbie l) has been left there, I'm also convinced that she works for yelp as I haven't had a response to my complaints.

Zany Cakes don't even know how to bake dry cakes!!!!

almost 5 years ago

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Tony M

Yelp is more then flawed it is totally impossible to filter all make believe or bad reviews but get this people the people who get the most reviews on yelp get rewarded or should I say bribed with a huge party yearly.

Is that nonbiased reviewing? It well known in the business that competitors write bad yelp reviews to get a competitors ratings lower.

Yelp is just a bad idea all around.

about 4 years ago

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