Yelp Sues Sites That Claim They Can Sell Business Owners 5-Star Reviews

Whenever you're turning to the crowd to make decisions, whether you need a new hair salon, a good restaurant or even a doctor, the veracity of the reviews you read can sometimes be called into the question. In the past, crowdsourcing platform Yelp has been accused of dubious practices when it comes to false reviews but now the company is finding itself on the other side of the legal line.

Yelp is suing the proprietors of sites, YelpDirector and Revpley for allegedly selling business owners four- and five-star Yelp reviews and filtering or removing the less-than-stellar ones. Other accusations include trademark infringement, unfair competition, cybersquatting, breach of contract and false advertising.

Related: FTC Takes No Action Against Yelp Following Year-Long Investigation Into Review System is the only site mentioned in the lawsuit that is currently active. Its tagline says its mission is to "create a large constant flow of positive reviews that stay on top of your profile and remove fake reviews."

Yelp contends in its suit that the sites made "unauthorized use of Yelp’s registered trademarks and sending spam e-mail and text messages to businesses listed on Yelp––including Yelp’s customers, prospective customers, and business account users."

Lately Yelp has had to deal with several legal entanglements. In January, the Federal Trade Commission's investigation into the platform was closed. The investigation was launched in 2014 after the FTC received complaints about the delayed removal of false reviews, and allegations that the company manipulated of reviews of businesses that didn't advertise with them.

Related: Appeals Court Rules That Yelp's Ad Sales Tactics Aren't Extortion, Just 'Hard Bargaining'

In 2010, Yelp was sued by small-business owners who claimed that after they said no to paid advertising, good reviews disappeared and bad reviews went to the top. This fall, the Ninth US Circuit Court of Appeals in San Francisco found in favor of Yelp, saying that the company's business practices fall under hard bargaining, not illegal extortion.   

Recently, there has also been legislation discussed in California that would make the banning of negative reviews on Yelp and other crowdsourcing platforms illegal. Yelp says on its site that if a company pays to advertise with them, the deal does not affect the businesses rating, allow them to recommend more positive reviews or remove their negative ones. 

Related: Yelp Co-Founder: 'There Has Never Been Any Amount of Money You Could Pay Us to Manipulate Reviews'

Edition: October 2016

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