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Yelp's tactics may be unsavory but legal

Merchants are facing more fees to get their rivals' ads removed from review listings

By McClatchy News Services


Among frequently asked questions on Yelp's website, there's this: "Will Yelp remove or reorder bad reviews if a business pays for sponsorship?"

And the answer: "No. You can't pay us to remove or reorder your bad reviews — it's just that simple."

It's not that simple, at least if you listen to the many small-business owners who say Yelp routinely uses bad reviews and competitors' ads as leverage to get merchants to cough up cash.

"They continually harass you and strong-arm you to get you to pay for their service," said Randy Boelsems, 64, who runs a boating supply company in Fountain Valley, Calif.

And if you don't play ball, he said, it's likely that negative reviews about your company will be featured more prominently than positive ones.

Such criticism isn't new, though it appears that Yelp has found new ways to lean on business owners. Last week, I wrote about an Alhambra, Calif., jeweler who said that after he canceled his Yelp ad, a saleswoman for the site warned him that competitors' ads would now appear with his listing.

"She said that for $75 a month, she could make those ads go away," Rick Fonger, 62, told me.

A Yelp spokesman, Vince Sollitto, defended this practice by saying merchants are being offered the chance to buy out the ad space accompanying their reviews.

Looked at another way, though, it could be said that Yelp creates a problem for businesses and then offers to fix it — for a price.

Kurt Snider, co-owner of a Solana Beach, Calif., video production company, also was told by Yelp that if he wanted a rival's ad off his listing, it would cost him. "It's unfair and unethical," he said. "It should be illegal."

Yelp has faced several lawsuits over its practices. They have been dismissed for lack of evidence, a company spokeswoman said.

In a 2011 decision, U.S. District Judge Edward M. Chen in San Francisco ruled that Yelp is protected by the federal Communications Decency Act when it decides which reviews to post.

The 1996 law shields websites from being sued for the content they publish, such as Nazi memorabilia sold on eBay or hate speech in a discussion forum.

"From a small-business angle, is what Yelp does distasteful?" said Erik Syverson, a Los Angeles lawyer specializing in Internet law. "Yes," but that doesn't make it illegal.

Antone Johnson, a San Francisco lawyer who formerly worked as vice president of legal affairs for the dating site eHarmony, offered a similar perspective. He used words like "nefarious," "crafty" and "fishy" to describe Yelp's practices.

"It doesn't pass the smell test," Johnson said. "But I don't see a statute that they're actually violating."

I spoke with a number of small-business owners who related stories about Yelp demanding payment to remove malicious reviews or being uncooperative in addressing false claims.

Illustrating the power Yelp has over merchants, some asked that their names not be used. They said they were afraid of making their relationship with the site even more troublesome or of drawing attention to negative reviews.

A Southern California real estate appraiser pointed me toward a review claiming that he sent an unlicensed trainee to appraise a property, which would be against state law. He said that when he explained to a Yelp rep that this simply wasn't true, the rep declined to do anything and refused to put a supervisor on the phone.

Chris Monks, 32, said he used to pay Yelp $300 a month to advertise his New Haven, Conn., moving company. Then he switched to the $75-a-month plan, which at least kept competitors' ads off his listing.

After he canceled that in January, Monks said, "suddenly past negative reviews reappeared and all the good reviews disappeared."

I checked out the Yelp listing for his company, 2 Young Studs Moving. There were four recommended reviews — a five-star review from February, a one-star from 2012, a two-star from 2011 and a five-star from 2009. A mixed bag.

But if you click on Yelp's link to "reviews that are not currently recommended," you'll find some more negative reviews and then page after page of five-star reviews from recent years. It's as if all the good reviews had been deliberately buried.

Yelp says automated software chooses which reviews to recommend and which ones to downplay, and "treats advertisers and non-advertisers exactly the same."

Kristen Whisenand, a senior public relations manager at Yelp, described the company's practice of running competitors' ads on businesses' listings as "a perfectly standard advertising practice."

She also reiterated that Yelp doesn't play up bad reviews if a merchant doesn't advertise and that lawsuits against the company have been dismissed "because they fail to present any fact-based evidence."

Whisenand passed along this quote from Sollitto: "Yelp has increased consumer empowerment and disrupted the traditional landscape for local business advertising. Some businesses understand the opportunity this affords them; some businesses do not appreciate the challenges that brings."

Yelp's own Yelp listing gives the company 21⁄2 stars overall. But, perhaps because Yelp is a Yelp advertiser, the first review you see is a glowing five-star homage to the service.

And there's no ad for a competing review site.

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awahana wrote:
The power is in the consumer.
Much like Facebook, if people stop using Yelp also, the world would be a better place.
Problem is, people have no restraint. Look at all the accidents from people who can't even resist when their phone rings and they're driving. Is it that important?
Or resisting driving thru the fast food stop.
What other examples of gluttony can you name in this Christian nation of ours.
Al Capone is not dead. Extortion is alive and well in the cyber 21st century.
on April 6,2014 | 04:49AM
al_kiqaeda wrote:
Ever notice the Yelp logo is like a flower...with middle petal sticking up?
on April 6,2014 | 04:00PM
808Unionist wrote:
Yelp is using thought control, it's the same programing the 1% and the media use to control are elections.
on April 6,2014 | 07:24AM
Wayne96744 wrote:
An extremely one-sided article. The writer cherry-picks a few disgruntled merchants and ignores the numerous businesses who, by offering great services, receive a huge boost from Yelp reviews. This writer decided in advance that Yelp business practices are unfair and set out to "prove" it. Crappy journalism at it's worst.
on April 6,2014 | 08:35AM
awahana wrote:
Yelp has multiple lawsuits over many years. I guess this is news to you or you have a stake.
on April 6,2014 | 05:39PM
ad1 wrote:
Better sell those yelp shares and go short. Dropping like a rock.
on April 6,2014 | 07:00PM
2NDC wrote:
Yelp used to be good. Now they have paid reviewers and even throw huge parties for those that post "good" reviews for businesses who subscribe to Yelp's advertising services. Don't have any faith in the Yelp reviews anymore.
on April 6,2014 | 07:55PM
Jerry_D wrote:
Yes, Yelp is simply another social extortion site against small businesses.
on April 6,2014 | 08:36AM
bumbai wrote:
Their corporate slogan: "Pay us or we'll make you Yelp!"
on April 6,2014 | 09:30AM
entrkn wrote:
Sounds like extortion to me.
on April 6,2014 | 10:09AM
KaneoheSJ wrote:
Most everyone I know who has had some kind of experience with Yelp tell me that that site "fixes" the reviews by denying their honest reviews and placing them in the hidden or unhelpful section. They notices that some businesses seem to have that "perk" where negative reviews get removed even before they are posted. Just visit the site and see those big time businesses with their sparkling reviews. And then see the ones with all the negative reviews, which are usually the smaller businesses who cannot afford to pay Yelp their "fees". I myself have had reviews stricken despite them being honest. As a result, you may experience what I have experienced. For example, I went to Diamond Head Market and Grill because of all the rave reviews. I ordered the teriyaki chicken mini plate which cost $7.50. There were two small pieces of chicken thighs that were grilled but they were not better than what I have had at Waiakamilo Drive Inn (same item called barbecue chicken) which cost about two dollars and fifty cents less. Plus, the pieces of chicken at Waiakamilo Drive Inn were larger and better tasting. And there is no indoor seating at Diamond Head Market and Grill. Waiakamilo Drive Inn has indoor seating and even have a television and access to a water dispenser which is free to all customers. Diamond Head Grill has four out of five stars while Waiakamilo Drive In has three and a half stars. So why the discrepancy? I suspect that Yelp is manipulating the system to give their "sponsors" an advantage. They claim that their software does the work. But I think that we would need to have their software checked by real programmers to see if they are indeed telling the truth. But even then, what is there to stop them from creating false accounts and placing negative reviews on those businesses who don't want to play their game?
on April 6,2014 | 11:49AM
KB wrote:
Lawyers and others should not use the" Yes but it does not make it illegal " idea ... we are glorifying the idea for the next generation verses teaching ethical values . The unethical exception gets to be main stream .
on April 6,2014 | 11:50AM
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