Stung by complaints from frustrated small-business owners, popular ratings website Yelp is overhauling the way it posts reviews.
The San Francisco company -- which allows users to write reviews of local businesses such as restaurants, nail salons and retail shops -- has long faced criticism that it gives preferential treatment to businesses that advertise with the company.
More recently, 10 small businesses, including four in Southern California, filed a federal class-action lawsuit accusing Yelp of pressuring them to advertise in exchange for removal of negative evaluations and other manipulative practices.
Although Yelp maintains that there is no connection between advertising and reviews, the 6-year-old company announced two major changes late Monday.
Effective immediately, the website is dropping its Favorite Review feature, which allowed advertisers to post their favorite review at the top of the page. It is also giving users access to posts previously hidden by Yelp’s review filter.
“It’s really about demonstrating to everyone that Yelp is a level playing field, that advertisers and non-advertisers are treated the same and are independent of review content. There’s no ‘pay to play,’ ” co-founder and Chief Executive Jeremy Stoppelman said during an interview Tuesday. “These changes should help dispel some of the misinformation and myths that have been propagated out there.”
For some business owners, the changes are not enough.
“I’m happy to see that the ball is rolling in the right direction,” said Greg Perrault, owner of Long Beach veterinary practice Cats & Dogs Animal Hospital and lead plaintiff in the class-action lawsuit filed against Yelp in February. “But there’s still a lot that needs to be done.”
Perrault said his problems with Yelp stemmed from an incident last year when he contacted the company about an inappropriate review, which he said Yelp agreed to remove.
“Then I got a sales call, and when I didn’t want to be a sponsor for $300, $600 or $1,000 a month, the review that had just been taken down came back up. That’s when the sales calls came in bunches,” he said. “From a business point of view, it felt like a shakedown.”
The lawsuit contends that Yelp runs an extortion scheme through which the company’s employees call businesses demanding monthly payments, in the guise of “advertising contracts,” in exchange for removing or modifying negative reviews.
Yelp user Jeff Schenck, 24, applauded the changes and called the increased transparency “a big plus.”
“I love using Yelp and I mostly trust what I see on Yelp,” the Web developer from Los Angeles said. “But certainly all of the issues surrounding them burying bad reviews or good reviews and whatnot based on advertising has made me think twice.”
Founded in 2004, Yelp boasts more than 10 million reviews to date and saw more than 31 million unique visitors in March.
A year ago, Yelp announced that it would open up its site to public responses from businesses -- a first for the company -- after business owners complained that they were being shut out of the Yelp community because they were unable to address what they perceived as unfair reviews.