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Yelp Sued, Dethroned as People Tire of Being Bullied by the Big, Bad Review Site

February 26, 2010

Cats and Dogs Animal Hospital owner Gregory Perrault is suing popular review website Yelp for allegedly offering to remove negative reviews in exchange for ad spend. MediaPost reports that soon after several negative reviews appeared on Perrault’s business’ page, he started receiving “high-pressure calls” from representatives at Yelp.com, who promised Perrault they’d send those nasty reviews of his business to the bottom of the queue in return for a few dollars in advertising.

This is surely not the first complaint against Yelp’s dirty tactics. Users often complain that their reviews, if negative, are deleted for no reason. Business owners have been saying for years that as soon as a few negative reviews appear, Yelp employees begin contacting them, sometimes daily, letting the owners know that there’s “something they can do” about those pesky negatives.

This law suit is a long time coming. The site that was once considered a beacon of free speech, and a very valuable one at that, is now facing very real trouble. After Perrault filed his lawsuit, thousands of businesses came forward with examples of Yelp’s bad business practices. One can only imagine how elated Google execs must be that their offer to purchase Yelp fell through.

Why are people so outraged? The business practices alone are not the problem. Lots of businesses employ deceitful strategies, so why is this different? It’s different because they’ve abused their power. They’ve corrupted the system and abused our trust, making us feel like we’ve been had. Yelp has the power to destroy businesses. It’s done so before. We’ve believed those negative reviews and bought into the hype, only to learn that there’s a systematic stamping out of good businesses for bad reasons going on behind the scenes.

It’s not always that extreme, but the results are damaging just the same. One Yelp user noticed that his ads were showing up at the top of a local competitor’s profile. Upon further investigation, he discovered that the Yelp team had asked the competitor to pay to have those ads removed. A local gelato shop owner told CBS news back in 2008 that the Yelp team applied pressure on her to become a sponsor by having ads for a competitor show up when people searched for her business. Yelp is able to hold the proverbial gun to business owners’ heads because they’re the biggest, most popular show in town.

Yelp got too big for its britches, it forgot its mission. Once selling ad space became the main objective, they forgot about the community they cultivated. They’ve managed to avoid a lot of negative press, even though there are literally thousands of complaints against them online. Looks like their good luck has run out. Yelp is in for quite a battle, not just a monetary battle, but a battle for its integrity and transparency. The judge might rule that there are no California laws to protect business owners like Perrault against behavior like this, but it won’t matter. In the court of public opinion, Yelp will have already lost.

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