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Friday, November 28, 2014         

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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

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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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