Yelp accused of extortion

Review website Yelp has been sued for allowing its employees to extort cash from companies to remove bad reviews.

Yelp provides consumer-driven reviews of restaurants, retailers, products.

However according to a lawsuit filed in Los Angeles federal court if someone posts a negative review, Yelp workers will call the restaurant and offer an advertising package whereby for, say, $300, the restaurant will get some advertising on the site as well as the bad review removed.

The complaint is chock full of alleged examples. In one case Mary Seaton, the owner of a furniture store in San Mateo, took Yelp up on an offer to remove her negative reviews if she advertised at a cost of $350 per month for six months.

For six months the negative reviews were removed and old positive ones showed up. After her contract was up, a negative review appeared.

To make matters worse the complaint alledges that Yelp employees have, on occasion, written negative reviews of businesses to give themselves a foot in the door to sell them the advertising.

Yelp denies it does anything like this and says it will dispute the case aggressively.

The case has highlighted the problem with Web 2 based reviews. These can be hijacked by rivals, ex-employees or people with a grudge. But Yelp depends on its credibility to survive. If you have to pay to keep bad reviews off the site then it does make the whole scheme pointless.