Yelp Makes Major Changes Regarding Reviews In Wake of Lawsuit And Dissatisfaction

On March 4th in a post on the Beverly Hills Bar Association’s IP/Social Media Blog I noted that a class action law suit filed against Yelp alleges it extorted advertising payments in exchange for removing or modifying negative reviews appearing on the site.  The plaintiff claims it asked Yelp to remove a false and defamatory review and in response the company sales representatives repeatedly contacted the plaintiff and requested that it advertise with Yelp in exchange for hiding or removing the negative review.

The allegations in the complaint are not new. On February 18, 2009 The East Bay Express, a free weekly publication, based in Oakland, California published an article entitled “Yelp And The Business Of Extortion 2.0” Yelp denied the allegations in either the complaint or the article were true, and promised to vigorously defend the lawsuit.

While not admitting any wrongdoing, Yelp has now decided to make some big changes.   On April 6th the company announced it was taking steps to “increase the transparency of its service.” It will remove its ‘Favorite Review’ advertising option which allowed those businesses that paid for advertising to display the best review over less enthusiastic reviews.  The company also said that users will now be able to see reviews of establishments that its filter algorithm previously removed from the site for potentially being fake or unfair. 

One thing my clients have complained about in the past is that Yelp would always remove a review if it was the first review of a business by a first time reviewer.  Some businesses–restaurants are the best example– fit nicely into Yelp’s business model.  Hot night spots or good eats places get hundreds of reviews.  But, other types of businesses are less likely to be reviewed.  Recognizing the power of Yelp, many businesses sought reviews from customers. 

Even though the reviews were legitimate Yelp would remove their reviews  because the customers were not big Yelp users.  Is that fair?  I don’t think so.  I understand Yelp doesn’t want fake reviews, but its methods were too harsh.  We’ll have to wait and see whether the issue facing businesses who solicit honest Yelp reviews from customers is affected by the modification to Yelp’s algorithm.


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