Yelp Sued By Shareholders For Lying About Suppressing Bad Reviews In Exchange For Cash

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A group of shareholders led by Joseph Curry have filed a federal class-action lawsuit against Yelp in San Francisco, the SFGate blog reports.

The suit alleges that Yelp management lied to shareholders about the widely suspected but never officially proven tactic of charging businesses money to suppress negative reviews, and that they promoted non-first-hand positive reviews (i.e., shills) in order to bump up paying customers' ratings.

Of course, this being America, they're also suing because those in the know sold off their shares right before the fit hit the shan and left the rest of the shareholders holding the increasingly empty bag, to the tune of $81 million in shares and a 33% hit on their stock price.

Restaurant owners in Orange County have long complained about the high-pressure sales calls from Yelp, the most popular crowdsourced review site. Many have refused to pay, and they assume that their ratings will take a hit. Two years ago, a widely reported incident between a Yelper and Playground owner Jason Quinn caused a run of one-star reviews on Playground's Yelp rating, led by butt-hurt Yelpies who'd never set foot in the door. The same thing happened to Los Angeles' Red Medicine restaurant in 2010 after they "outed" Los Angeles Times food critic S. Irene Virbila.

Sounds like the shareholders are finally figuring this out for themselves. As they say back East, "Light dawns over Marblehead."

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77 comments
hollykick
hollykick

well thats why yelp sucks .. i am not even sure how they are running a scam.  Yelp is not really a help - it is obviously trying to look at ways it can earn more money to stay afloat.  My guess it will die in a few years .. unless it changes. but without profits too it will die , so its a catch 22 situation , it is certainly a hard business to be in. 

vegandawg23
vegandawg23 topcommenter

Businesses need to do the right thing. Lower your prices. If you are charging $10 for a beer and have hipster servers who think you're just there hanging out and don't pay attention to your table then you're going to get bad reviews. Have your friends write fake reviews for you and they're going to get reported and taken down as they come off like advertisements. Make crappy food, have snobbish servers, and overpriced pretentious food and you're going to get dinged. Haven Gastropub comes to mind. Look at some place like Moros in La Habra and then look st some place like Haven and see how the reviews are. Very accurate picture of what's good about Moros and what's wrong with Haven.

Mariposa Ashby
Mariposa Ashby

I just recently heard about this from quite a few actual business owners( not just restaurant owners by the way) who use Yelp. And I'm completely appalled, I even know a few owners who said because they actually got good reviews Yelp took their business profiles down. Absolutely shameful and hurtful! I love to Yelp it's the only way I really trust to find out about new places but if your gonna take down profiles and charges high fees then that's just wrong.

johnny_automatic
johnny_automatic

Has any restaurant taken Yelp or a reviewer to court for slander?  I am amazed at the accusations reviewers get away with unchallenged.  I swear one reviewer locally has gotten food poisoning every place she's ever eaten if one is to believe her.  Most review sites won't allow such accusations to be published.  

Nolan Raffanello
Nolan Raffanello

Down with Yelp! It's the worst soundboard for frustrated people. Nothing objective. Then, you only have the option to positively rate someone's rant with either cool, funny or useful. God forbid you don't agree with a review. As a small business owner, it is sadly very common that frustrated customers attempt to hold you hostage in return for a favorable review if you meet their demands. Yelp has contributed to creating this unhealthy culture.

Vincent Rose
Vincent Rose

I've never been steered wrong by yelp. The one time I ignored bad reviews I ended up eating a gray burger,

Geoff Smith
Geoff Smith

I'm disgusted by Yelp. They routinely delete my positive and negative reviews for no reason.

Keith Barker
Keith Barker

That's too bad. I've used Yelp to find some fantastic restaurants that I would not have otherwise found. I suppose it's like Amazon, where a significant portion of their reviews are written by media companies and not the actual customers.

Stan Gutierrez
Stan Gutierrez

Completely useless legitimate reviews. Extortion of businesses for money is all it is.

Toni Rae
Toni Rae

No, yelp drives me nuts with calls, snail mail, & spam.

Mai Tran
Mai Tran

Teri Tran Souriya Hanesana

Travis Call
Travis Call

I disagree. I owned Ringside Lounge in Huntington Beach and the only reviews yelp ever pulled were good reviews. Any negatives we had stayed on there and I payed those fucks 350 a month. As a former restaurant owner I like yelp. They never did anything shady on the reviews end for me

David Albanez
David Albanez

Yep they continue to call me asking for $$$ to remove all reviews.

Ruben Diaz
Ruben Diaz

Yelp can kill your business. It's just not possible to please every single customer. The ones that find a fault with your company and love to comment negatively to make them feel better can say things that are simply not true. "Today I called and got an automated message saying (company name) was closed and to call back during business hours. It was 9:30am on a Tuesday! I would never do business with this company!" Truth is the company I work for doesn't even have such an automated message but the 1 star review still remains!!

Ro Ar
Ro Ar

Good, about damn time.

Lisa Thecupcakelady
Lisa Thecupcakelady

AMEN!!!!! YELP is horrific at best. If you don't buy into the YELP family, suddenly your good reviews that come to you via email, never appear to the public online and will disappear from your account. Truthfully since people are rolling out with "THEIR personal opinions, about THEIR personal experience" who's to say it would be the same for the next person? If you like toasted coconut and the person behind you doesn't, does their "PROFESSIONAL" unasked for opinion matter when they say they didn't like the toasted coconut? I'm old enough to come from a time when "Who the hell are you to judge" gave you a moment to pause before you opened your mouth. Now self proclaimed "judges" ramble endlessly spouting off their opinions and practicing their blog writing skills while potentially destroying someone's business and livelihood. Since there are in fact people who are employed, usually by media related organizations to give their professional opinion, My biggest question has always been, "What is your purpose in writing a review? Are you being paid? Is this how you earn a living? Do you hope to be a famous critic? And MOST IMPORTANTLY.......CAN YOU DO IT BETTER?" If the answer is it's not my job, I'm not getting paid, and no I can't then WTH? And if you CAN do it better, DO SO and keep it moving.

Kristin Ausk
Kristin Ausk

I told them I was not interested in advertising with them & a week later 3 of my good reviews just disappeared. Reviews from avid yelpers. Hmmm

Carli Savedra
Carli Savedra

Yelp is the worst, and is a total scam! #yelpyelp

Marco Salgado
Marco Salgado

Why would anybody liaten to yelp reviews. I find them to be wrong more often than not...

Mike Maddux
Mike Maddux

Yelp filters out the really good reviews unless you pay them.

Gladys Waite
Gladys Waite

Pauline Nguyen I told you they were being sued!

Dale Anderson
Dale Anderson

I have seen ads on Craig's list for yelp . Not lately though . Pays 20 bucks .

processlife
processlife

this place had a bunch of faggots working there and when I talked about it on yelp,  they threatend to call the cops.. I said ''go ahead libtards''!

Jill Marie
Jill Marie

I am deleting the app and never using it again !

Roger Hogan
Roger Hogan

It's about time somebody did something about yelp and their extortion

Pinkindie
Pinkindie

Hmmm sounds like the Better Business Bureau

mannylegacy
mannylegacy

I've been using and leaving Reviews/Tips on Yelp for years and never have I had any of my Negative reviews deleted. In Fact I left a negative review for The Old Ship in Fullerton and I was badgered by someone that didn't agree with my review. I fired back at that particular Yelper and never again heard from them again.

vegandawg23
vegandawg23 topcommenter

They delete reviews that appear to be shills and ones that are politically motivated. For example, I reported a bunch of chik-fil-a reviews that came out after they came out against the gays. People hadn't actually eaten chik-fil-a and were just making political statements. I've never had a review deleted.

mannylegacy
mannylegacy

Are you a business owner?.........I have never been pestered with calls, snail mail and or spam

mannylegacy
mannylegacy

What ever happened to Ringside. I ate there once and thought the food was great. Service was ok but damn those Sliders and Fried pickles were devine! 

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