Internet Law

Suit Says Yelp Runs 'Extortion Scheme,' Asks for Ad Money to Modify Bad Reviews

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The operators of a popular Internet customer review site for restaurants and small businesses have been sued by two law firms alleging unfair business practices and an “extortion scheme.”

Yelp, the suit alleges, has its employees “call businesses demanding monthly payments, in the guise of ‘advertising contracts,’ in exchange for removing or modifying negative reviews appearing on the Web site,” reports the Bits blog of the New York Times.

Filed yesterday in federal court in Los Angeles, the suit says Yelp sought a $300-per-month contract from a Long Beach veterinary hospital in exchange for hiding or removing a negative review. It seeks class action status and injunctive relief as well as damages.

It contends that a Yelp salesperson told Cats and Dogs Animal Hospital that, in exchange for purchasing a one-year advertising subscription, Yelp would “hide negative reviews on the Cats and Dogs Yelp.com listing page, or place them lower on the listing page,” reports Inc.. The subscription also allegedly would allow the veterinary hospital to arrange the order in which customer reviews of its services appear and optimize Google search engine results.

Vince Sollitto, who serves as vice president of communications for Yelp, says in a written statement that he hasn’t yet seen the suit. However, he calls the allegations “demonstrably false,” saying that many businesses have both positive and negative Yelp reviews.

Additional coverage:

TechCrunch: “Yelp Hit With Class Action Lawsuit For Running An “Extortion Scheme”“

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