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Yelp Faces Extortion Claims in Cash-for-Ratings Scandal

Yelp’s growing reputation as the go-to site for local business reviews can turn a hole in the wall into a booming brunch joint overnight with good reviews. And turn things sour just as quickly. So goes the ebb and flow of dog-eat-dog capitalism – but now some companies are claiming that Yelp has abused its position of authority by tampering with reviews in exchange for ad dollars.

Gregory Perrault, a veterinarian in Long Beach, Calif., says Yelp attempted to rope him into advertising with the site by offering to remove or hide bad reviews if he signed paid for an ad campaign. Specifically, Perrault’s class-action lawsuit alleges that bad reviews that had been removed by Yelp staff for violating its own rules mysteriously resurfaced after Perrault turned down the site’s ad salespeople.

“My fear is that unless I took this step and I don’t sign up for their plan, I’m going to continue to get harassment,” Perrault told ABC News. “It’s like they’re holding me over a barrel here if I don’t sign up.”

The owner of a furniture shop, also cited in the case says she cracked and paid Yelp’s $350-a-month fee to advertise, and subsequently saw negative reviews knocked to the bottom of the page, only to spring back up when she stopped paying after six months. Others claim that Yelp offered to remove or move bad reviews if they advertised, or that positive reviews disappeared when they rebuffed Yelp’s sales team.

Yelp’s vice president of corporate communications, Vince Sollito, denied the allegations. “Yelp treats review content equally for advertisers and nonadvertisers alike,” Sollitto told ABC. “And advertisers pay for advertising, not control over reviews on their page,” he said.

The company’s “myths” page specifically deflects the claim that advertisers can manipulate reviews, although it does clarify that they are granted the ability to add a slideshow of their establishment and choose a favorite review to be featured at the top of the page. Another entry claims that Yelp salespeople do not have access to the reviews system, so as not to tempt them, and explains why reviews sometimes disappear. (They can be removed for violating review guidelines, by an automated review filter, or just taken down by the authors.)

Lawyers from San Diego and Miami are handling the lawsuit, which asks the court to compel Yelp to stop the practice, reveal how much it collected by illegal means, pay restitution, and reimburse attorney’s fees.


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