Yelp, You Have Been a Naughty, Naughty Extortionist!

Yelp keeps getting hit with lawsuits.  At first offering advertising to local businesses, but when Yelp is declined those same businesses suddenly see their high ranking consumer reviews dissapear from the Yelp website.

“… a company founded in 2004 by two former PayPal employees, Yelp is a local reviews website covering almost 40 states. Yelp also launched in the UK in January 2009. Users write and read reviews about anything from their favorite hole in the wall restaurant to the worst downtown club. Additionally Yelp offers social networking features: the ability to add friends, groups, events, talk in forums or message contacts. The idea behind this is that users will trust their friend’s reviews more than others. “– Crunchbase

[The] latest lawsuit filed by Boris Levitt, the owner of Renaissance Furniture Restoration in San Francisco, claims that Yelp’s “unfair and unethical conduct in promoting, marketing and advertising its website as maintaining unbiased reviews” is unlawful and hurt his business. Levitt’s suit is similar to the previous claims that Yelp is extorting businesses for advertising.

The business claims that after declining a request to purchase advertising on Yelp, a number of positive reviews from his business’ listing on the reviews site mysteriously disappeared, downgrading the company’s rating on the site. Levitt claims that ten out of eleven five star reviews were removed from his company’s page following his decision not to purchase advertising on Yelp.

Two weeks ago, the company got slapped by a lawsuit from from the D’ames Day Spa of San Diego County, accusing Yelp of removing many positive reviews because the spa declined to run ads on the site. And the previous week, two law firms, Beck & Lee from Miami and The Weston Firm in San Diego, filed a class action lawsuit in Los Angeles federal court alleging unfair business practices by local business review and rating website operator Yelp.

The lawsuit alleged that the heavily funded startup runs an “extortion scheme” and has “unscrupulous sales practices” in place to generate revenue, in which the company’s employees call businesses demanding monthly payments in the guise of advertising contracts, in exchange for removing or modifying negative reviews.

Additionally, today, nine small businesses from across the United States have joined the Beck & Lee and Weston suit, including The Bleeding Heart Bakery in Chicago; Bleeding Heart Bakery of Chicago, Illinois; Scion Restaurant of Washington, D.C.; J.L. Ferri Entertainment, Inc. of New York, New York; Sofa Outlet of San Mateo, California; Celibré, Inc. of Torrance, California; Astro Appliance Service of San Carlos, California; Wag My Tail, Inc., of Tujunga, California; Le Petite Retreat, of Los Angeles, California and Mermaids Cruise of San Francisco, California

Last year, the East Bay Express ran an explosive story, basically accusing Yelp of being in the ‘Business of Extortion 2.0′, which covered similar ground. Shortly after reporter Kathleen Richards published the article, Yelp vehemently denied everything and called her piece inaccurate.

See the original article and the lawsuit documentation at Tech Crunch.