Yelp has long been accused of acting like the Tony Soprano of online reviews. Companies claim that Yelp favors advertisers by emphasizing their search results and reviews. Some businesses say Yelp has tried to persuade them to buy ads by offering to make negative reviews disappear — or tried to strong-arm them by threatening to delete positive comments. A few companies banded together in 2010 to sue the firm over such practices. And some Yelp shareholders have sued, too, claiming the company inflated its revenues by coercing businesses to advertise. More than 2,000 complaints about Yelp have also piled up at the Federal Trade Commission, which has scrutinized Yelp’s ad-sales tactics and “recommendation” software, used to highlight reviews deemed the most useful to consumers.
So far, Yelp has batted down all these claims. A federal judge dismissed the shareholder lawsuit last year, finding scant signs of “allegedly extortionate practices.” Judges also tossed the local-business lawsuit in 2014, writing that Yelp’s threats of “economic harm” were, “at most, hard bargaining.” The FTC decided last year to close its inquiry without taking any action. For its part, Yelp says it takes “many steps to prevent gaming of our system and to protect consumers and business owners alike.”
Yelp’s successes haven’t stymied its critics, though. On sites such as Yelp-sucks.com, business owners and consumers continue to rant about the firm. An upcoming documentary, Billion Dollar Bully, takes aim at Yelp’s tactics. On TV, Yelp’s hefty influence in the rating world has made it the target of biting satire. On an episode of the animated series South Park last year, elite (and insufferable) Yelpers try to extract special treatment from restaurants, which exact some unsavory revenge.
Yelp accused of unethical business practices in documentary
SAN FRANCISCO (KGO) — The trailer for a new documentary called Billion Dollar Bully has caught the attention of Wall Street. After posting a two-minute trailer online, Yelp’s stock closed down more than four percent Thursday and half a percent Monday.
Local director Kaylie Milliken interviewed Bay Area businesses that refuse to advertise on Yelp.
The owners say they’re getting punished with negative reviews. “I’ve been managing properties since I could push a lawnmower,” Property manager David Behling said.
The wall behind his desk is covered with accolades and the Better Business Bureau endorses him, but online Behling’s reputation has a different slant. “Definitely the worst property management company I’ve encountered,” he said. “Another clueless incompetent, another unethical, dishonest.”
Those comments were posted more than five years ago, yet they top his Yelp page and the five-star review from last month is gone. “I’ve lost business because of it,” Behling said.
Behling says Yelp is practicing extortion and he’s speaking out about it in a new documentary called Billion Dollar Bully.
Milliken says she’s found evidence that when companies refuse to pay Yelp for advertising, their Yelp ratings suffer. “I want the business owners to have a voice because right now they don’t and I want them to feel some sort of vindication for what they’ve gone through,” she said.
“They call a couple of times and nicely we told them no because we don’t have the budget, I tell you about six or seven hours later, three or four of my good reviews were gone and two other one-star reviews appear,” Botto Bistro owner Davide Cerretini said.
Some industry insiders attribute the drop in Yelp’s stock this week to the documentary’s allegations.
Yelp released this statement saying, “There is no merit to the claims they appear to highlight, which have been repeatedly dismissed by courts of law, investigated by government regulators, including the FTC and disproven by academic study.
“If they don’t have anything to hide, then sure they shouldn’t be worried about what comes out in the documentary,” Milliken said.
Laura Lund, a restaurant owner from Berea, OH found all her positive Yelp reviews gone after she refused to pay for the company’s advertising services. Now she is urging all her remaining customers to steer clear of Yelp and use other review platforms such as Trip Advisor, Facebook, and Google.
Relying on Yelp to choose where to eat, have a drink, or get a haircut has become commonplace in the fifteen years the reviews website has been around. Numerous studies on the effect online reviews have on businesses that have been conducted in recent years show these websites way heavily with consumers’ decision-making process.
The one by Review Trackers suggests that more than 33 percent of diners will not choose to eat in a restaurant with less than a 4-star rating on online review sites like Yelp, Google, and TripAdvisor.
Now imagine you’re a restaurant owner who wakes up one day to find all the positive Yelp reviews gone and only the negative ones left on the platform.
That’s exactly what happened to Laura Lund, the owner of The Lazy Bee restaurant in Berea, OH, after she refused to pay for Yelp’s advertising services. Four months after opening her restaurant, she was approached by the review platform about obtaining their advertising services.
Lund says she did not return their calls and was shocked by the repercussions. “Why were all of the good reviews hidden and only the bad ones left up? To me that seems like bullying,” Lund told News 5 Cleaveland.
Unfortunately, this small business owner from Ohio isn’t the first one to accuse Yelp of unfairly treating businesses that decline Yelp’s advertising services.
Many business owners have complained about foul play and bullying by the company over the years. More than a thousand of them have reported the ‘pay-and-play’ scheme deployed by Yelp to the Better Business Bureau, a non-profit organization that strives to create a fair marketplace. Ironically, the BBB awarded Yelp a one-star rating accompanied by a slew of negative reviews.
Other businesses have pursued the matter even further, filing class-action suits against the social reviews website, but to little effect. In January 2018, a group of business owners from Dallas sued the review website for removing the five-star ratings after they too declined to pay for advertising services. And back in February 2010, Yelp was sued for asking businesses to pay the company in exchange for the removal of negative reviews. Ultimately, courts ruled in favor of the San Francisco-based reviews platform.
Aware of the failure other small business owners experienced in courts in the past, Lund feels her best chance at getting back at Yelp is to speak directly to her customers, advising them against using Yelp and diverting them to other review platforms.
“It could hurt our business, our livelihood, and affect our children in the end. I felt like their practices were deceptive. This is just the beginning of people lashing out at them and saying you either need to change your ways or we’re going to let our customers know not to use your site,” said Lund.
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