Yelp denies changing entries in exchange for ad revenue
posted April 18, 2010
A consumer review Web site has drawn the ire of merchants across the nation, including a Long Beach, Calif., veterinarian, for allegedly unfair business practices.
Dr. Gregory P. Perrault of Cats & Dogs Animal Hospital filed a federal class action lawsuit in February against Yelp, a popular San Francisco-based site (www.yelp.com) where any person can write a review about nearly any business.
The company has been accused of having its sales representatives offer to rearrange positive and negative reviews for "sponsors," or companies that advertise on the site or chip in for Yelp Elite parties for its prolific reviewers.
Yelp's CEO has denied any wrongdoing and said that the businesses suing his company don't understand how the site works.
"Real people, real reviews"
Yelp's premise is relatively straightforward. Site visitors can search where to find a restaurant or clothing store, for example. Results show related local businesses accompanied by brief descriptions, contact information, and the like. Visitors who sign up for a free Yelp account may also write a review of a business and rate it on a five-star system.
The site's goal is to provide an online city guide with a Web 2.0 mentality, allowing "real people" to write "real reviews." Its popularity took off not long after it was created in 2004, mostly in large urban areas, although its reach now extends to nearly every U.S. city.
Businesses can be listed on the site for free, but they also have the opportunity to pay a monthly subscription fee. Doing so entitles these businesses to do such things as put up a slide show of images from their business, highlight a user's review they like the most, and promote their business as a sponsored search result and on their competitors' business pages.
Dr. Natalie C. Waggener, owner of the South Boston Animal Hospital, said advertising on Yelp makes sense for her clinic. It is located in a newly gentrified area filled with numerous transplanted young couples.
"It's cost-effective for us. I'm not sure if it's for everybody, like a teeny, tiny practice in a rural area. You just have to look at your clientele," she said.
Dr. Waggener said her clinic's Yelp page received approximately 65 views a week. She estimates of the 50 to 60 new clients her clinic sees each month, about 15 came because of her page.
"It's definitely worth it—whether you advertise or not," she said.
Pay to play?
For a time, Dr. Perrault, too, enjoyed the benefits of Yelp. His clinic generally received favorable reviews, and he believes the listing attracted some new clients. The veterinarian would even use negative and positive reviews from the site during staff meetings to improve service.
But in September 2009, according to the complaint, he noticed a negative review on his clinic's page. Dr. Perrault discovered that the review referenced a visit more than 18 months earlier. He requested that review be taken down because it violated the site's review guidelines.
Yelp agreed and took the review down but another negative review appeared five days later.
Dr. Perrault said in the court filing that not long after that, the hospital began receiving "frequent, high-pressure calls from Yelp advertising employees, who promised to manipulate (the) Cats & Dogs Yelp listing page in exchange for Cats & Dogs purchasing an advertising subscription."
"I took an hour of time with a salesman, so it's not like I didn't understand what they were selling," he said. "They'd say things like 'You'll have more control' and 'We'll move (bad) reviews to the bottom.'"
Negative reviews would pop up after Dr. Perrault or office manager Javier Vargas declined sponsorship from the salesman. This happened for months.
It wasn't until this January that he discovered from news articles that the same thing was happening to other businesses.
That's when Dr. Perrault decided to take action. He filed the lawsuit in a California district court Feb. 22. It alleges Yelp engaged in extortion and attempted extortion and asks that the court stop the site from manipulating reviews, give back the money made from this advertising system, and pay restitution and all legal fees along with unspecified damages.
The lawsuit was amended in March to add nine more companies. In addition, two similar lawsuits were filed that month—one by an owner of a day spa in Imperial Beach, Calif., in the same district court, and one by a furniture restoration business in San Francisco in another California district court.
All a misunderstanding
The company announced April 6 that it will make two substantial changes to its pages to address complaints from business owners. First, readers will be able to see reviews that Yelp filtered out by clicking on a link. Second, advertisers on Yelp will no longer be able to post their favorite review at the top of the page where they are listed.
Yelp's CEO, Jeremy Stoppelman, responded to Dr. Perrault's lawsuit by posting on Yelp's blog, http://officialblog.yelp.com, a week after the filing.
He refuted the notion that Yelp offers to remove or reorder reviews in exchange for money. Instead, he wrote, Yelp sales representatives sell sponsored search results, enhanced listings, and targeted advertisements.
"With the exception of a single review at the top of their review list—clearly marked as such—advertisers gain no control over how reviews appear on their business page," Stoppelman wrote.
He also addressed the allegations that Yelp's sales department has the ability to suppress or add reviews and that this ability is used to coerce would-be advertisers or punish businesses that decline to advertise.
"Our entire sales department is prohibited from creating any review content on the site. No member of the sales department has the administrative capability to remove reviews," Stoppelman wrote.
He continued, "Despite hundreds of (sales representatives) making thousands of points of contact via e-mail and over the phone with potential advertisers every single day, no evidence in the form of an e-mail or phone recording has ever emerged to suggest any member of our sales team has misrepresented the product described above."
Dr. Waggener said in her experience Yelp representatives have been nothing but professional.
"I don't think they are doing anything like manipulating those reviews, from my perspective," she said.
Dr. Waggener remembers one particularly bad experience when a disgruntled client posted negative reviews on a number of sites and even accused her of abusing his dog, which she denies.
Dr. Waggener called Yelp to have his review removed.
"They didn't remove it immediately, but they eventually did decide that what he wrote could be detrimental, so his review was removed, but there was a real process. It's not because I advertised; it was because of the wording," Dr. Waggener said.