FTC Discloses Small Business Complaints Against Yelp

yelp-featuredMany small businesses continue to feel that Yelp is unfair or complain that Yelp salespeople are using strong-arm tactics to get them to buy advertising on the site. Claims of “extortion” against Yelp have persisted though never been proven with evidence and the company has successfully defended a number of lawsuits on those grounds.

These “extortion” claims again resurfaced in two articles published this week. One in the Wall Street Journal, focused on a lawsuit brought by Hadeed Carpet in Virginia over anonymous, critical reviews on Yelp. The business owner claims that the reviewers were not actual customers and sued to get their identities.

Yelp intervened in the case to protect the First Amendment rights of its users to anonymity. Yelp cannot be sued for the content posted by its users (e.g., for libel). The Virginia state court of appeal ruled that Yelp must disclose the identities of the seven individuals who posted the anonymous reviews on the Hadeed profile. Yelp has appealed to the Virginia Supreme Court.

Another article, more anecdotal in nature, appeared in the LA Times. It characterizes Yelp sales practices as a small business “shakedown.” In particular the article objects to the practice of asking business owners to advertise as a way to remove competing ads on their profiles.

Beyond this the Wall Street Journal reported on FTC disclosure of complaints filed by business owners against Yelp. The disclosures were made in response to WSJ Freedom of  Information Act requests. Most pertain to Do Not Call requests made by the business owners. I’ve embedded the letter below.

In essence the letter says there have been 2,046 complaints against the site. Most of the disclosed complaints report that Yelp sales reps continue to call after they’ve been asked not to by the involved businesses. One complaint invokes the “extortion” concept but others do not:

Yelp continues to call our business trying to extort us for advertising dollars. They call, solicit us, and when we decline, they tarnish our small business’ image on their website.  I’ve repeatedly demanded for Yelp to stop calling us, however they still call about every 2 months.  From now on, I will log their call as a complaint.

For context and comparison, Google also has numerous FTC complaints on file.

Yelp’s algorithm flagging questionable or dubious reviews has long been the subject of confusion and controversy among business owners. The uncertainty surrounding its operation and the “filtering” of positive reviews by Yelp has sparked frustration and fueled various conspiracy theories. However Yelp has a critical interest in protecting against fraudulent or fake reviews.

Yelp has made numerous efforts to explain what it used to call its “review filter” to SMBs. However it appears the site needs to also do a better job of this and of sales training (and/or prospecting) to prevent the kinds of complaints disclosed by the FTC.

Related Topics: Channel: Local | Legal: General | Top News | Yelp

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About The Author: is a Contributing Editor at Search Engine Land. He writes a personal blog Screenwerk, about SoLoMo issues and connecting the dots between online and offline. He also posts at Internet2Go, which is focused on the mobile Internet. Follow him @gsterling.

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  • RobertAKeller

    Yelp continues to call our business trying to extort us for advertising dollars. They call, solicit us, and when we decline, they tarnish our small business’ image on their website. http://qr.net/sgp9

  • doomedby2020

    Yelp removed all my good reviews and left my single bad one after i refused advertising.
    They will mess with your reviews, to mess with your rating, so you cannot benefit from their site (not that these businesses even want yelps so-called benefits).
    They hide behind free speech and decency laws and yet there is no freedom of speech nor any decency demonstrated at yelp.

    Hope their stock tanks…..further.

  • polar_traveler

    My small company has suffered the same experience — one negative review, okay, understood, but why do they filter out every positive, from clients who put a lot more effort into the review? Because we don’t pay yelp, apparently. http://www.yelp.com/biz/cheesemans-ecology-safaris-saratoga

    Eventually a class action lawsuit will stick, well deserved. There’s a move on.org petition against this abusive practice: http://petitions.moveon.org/sign/pay-it-forward-ban-yelp

  • doomedby2020

    Your listing looks like mine, almost identical. Yelp has clearly identified you as a “non-contributor” . You can start buying advertising and they will stop burying your good reviews.

    Or

    After they took down all my good reviews I contacted the client who left me a bad review. She was a “yelper”. I gave her all the proof she needed, to know what Yelp was doing, this convinced her to remove her bad review. She no longer uses Yelp, she had no idea that Yelp was doing what they are being accused of.

    What you don’t want to do is try to change your company name/number/website on your listing.
    I did. 3 days later Yelp changed it back but left the bad number and locked me out of my listing. The story gets more bizarre from here but i will skip it. Eventually a Yelp salesman called me, offered yelp services and informed me that the wrong number was on my account.
    I declined yelps services, I’ve requested the number be changed 3 times, its been weeks and they still have not changed the number. I don’t think they ever plan to.
    They have since removed all uploaded photos.

    And people, even skeptics, believe yelp does not manually manipulate their reviews. It is an amazing display of naivete.

  • polar_traveler

    Stunning. Thanks for your reply. Yelp’s abusive, manipulative tactics are ultimately unsustainable and the short selling stock traders will one day have a feast on them.

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