Business

Yelp's tactics feel 'nefarious' and 'fishy,' even if they're legal

Economy, Business and FinanceColumnLaws and LegislationBusinessCrime, Law and JusticeSmall BusinesseseHarmony

Among the frequently asked questions on Yelp's website, there's this: "Will Yelp remove or reorder bad reviews if a business pays for sponsorship?"

And the answer: "No. You can't pay us to remove or reorder your bad reviews — it's just that simple."

It's not that simple, at least if you listen to the many small-business owners who say Yelp routinely uses bad reviews and competitors' ads as leverage to get merchants to cough up some cash.

"They continually harass you and strong-arm you to get you to pay for their service," said Randy Boelsems, 64, who runs a boating supply company in Fountain Valley.

Have a consumer question? Ask Laz

 

And if you don't play ball, he said, it's likely that negative reviews about your company will be featured more prominently than positive ones.

Such criticism isn't new, though it appears that Yelp has found new ways to lean on business owners. Earlier this week, I wrote about an Alhambra jeweler who said that after he canceled his Yelp ad, a saleswoman for the site contacted him to warn that competitors' ads would now appear with his listing.

"She said that for $75 a month, she could make those ads go away," Rick Fonger, 62, told me.

A Yelp spokesman, Vince Sollitto, defended this practice by saying merchants are being offered the chance to buy out the ad space accompanying their reviews.

Looked at another way, though, it could be said that Yelp creates a problem for businesses and then offers to fix it — for a price.

Kurt Snider, co-owner of a Solana Beach video production company, also was told by Yelp that if he wanted a rival's ad off his listing, it would cost him.

"It's unfair and unethical," he said. "It should be illegal."

Yelp has faced a number of lawsuits over its practices. They have been dismissed for lack of evidence, a company spokeswoman said.

In a 2011 decision, U.S. District Judge Edward M. Chen in San Francisco ruled that Yelp is protected by the federal Communications Decency Act when it decides which reviews to feature on its site.

The 1996 law shields websites from being sued for the content they publish, such as Nazi memorabilia offered for sale on EBay or hate speech in a discussion forum.

"From a small-business angle, is what Yelp does distasteful?" said Erik Syverson, a Los Angeles lawyer specializing in Internet law. "Yes," but that doesn't make it illegal.

Antone Johnson, a San Francisco lawyer who formerly worked as vice president of legal affairs for the dating site eHarmony, offered a similar perspective. He used words like "nefarious," "crafty" and "fishy" to describe Yelp's practices.

"It doesn't pass the smell test," Johnson said. "But I don't see a statute that they're actually violating."

I spoke with a number of small-business owners who related stories about Yelp demanding payment to remove malicious reviews or being uncooperative in addressing false claims.

Illustrating the power Yelp has over merchants, some asked that their names not be used. They said they were afraid of making their relationship with the site even more troublesome or of drawing attention to negative reviews that Yelp has refused to take down.

A Southern California real estate appraiser pointed me toward a review claiming that he sent an unlicensed trainee to appraise a property, which would be against state law. He said that when he explained to a Yelp rep that this simply wasn't true, the rep declined to do anything and refused to put a supervisor on the phone.

Chris Monks, 32, said he used to pay Yelp $300 a month to advertise his New Haven, Conn., moving company. Then he switched to the $75-a-month plan, which at least kept competitors' ads off his listing.

After he canceled that in January, Monks said, "suddenly past negative reviews reappeared and all the good reviews disappeared."

I checked out the Yelp listing for his company, 2 Young Studs Moving. There were four recommended reviews — a five-star review from February, a one-star review from 2012, a two-star review from 2011 and a five-star review from 2009. A mixed bag.

However, if you click on Yelp's link to "reviews that are not currently recommended," you'll find some more negative reviews and then page after page of five-star reviews from recent years. It's as if all the good reviews had been deliberately buried beneath the bad ones.

Yelp says it has no control over how reviews are played on the site. It says automated software chooses which reviews to recommend and which ones to downplay, and "treats advertisers and non-advertisers exactly the same."

I asked to speak once again with Sollitto, Yelp's vice president of corporate communications. A senior PR manager, Kristen Whisenand, asked what I wanted to discuss and then emailed me a statement.

"Not sure what's left to explore here," she said of allegations that Yelp is trying to extract money by running competitors' ads on businesses' listings. "Yelp disagrees and thinks it's a perfectly standard advertising practice."

She also reiterated that Yelp doesn't play up bad reviews if a merchant doesn't advertise and that lawsuits against the company have been dismissed "because they fail to present any fact-based evidence."

Whisenand passed along this quote from Sollitto: "Yelp has increased consumer empowerment and disrupted the traditional landscape for local business advertising. Some businesses understand the opportunity this affords them; some businesses do not appreciate the challenges that brings."

And one business — Yelp — doesn't seem to care what other businesses are saying on a consistent basis, that they feel muscled by the site and treated unfairly.

Yelp's own Yelp listing gives the company 2 1/2 stars overall. But, perhaps because Yelp is a Yelp advertiser, the first review you see is a glowing five-star homage to the service.

And there's no ad for a competing review site.

David Lazarus' column runs Tuesdays and Fridays. He also can be seen daily on KTLA-TV Channel 5 and followed on Twitter @Davidlaz. Send your tips or feedback to david.lazarus@latimes.com.

Copyright © 2014, Los Angeles Times
Related Content
Economy, Business and FinanceColumnLaws and LegislationBusinessCrime, Law and JusticeSmall BusinesseseHarmony
Comments
Loading