More Unproven Yelp ‘Extortion’ Accusations Publicized

    January 24, 2014
    Chris Crum
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The story has been going on for quite some time. Businesses accuse Yelp of “extortion” or holding their positive reviews hostage unless they spend advertising money, and Yelp denies it vehemently, citing a lack of evidence and research appearing to contradict it.

But the story isn’t going away, as more accusations make their way to the public eye.

Has Yelp sufficiently proven that such accusations are unsubstantiated? Tell us what you think.

Last week, the Seattle Times ran a guest column by Terry Thomas, a small business owner who has taught business ethics at Seattle University and the University of Washington.

“Shortly after our company began receiving positive reviews on Yelp, an energetic Yelp salesman called me, congratulating me on our company’s online reviews, and offering to help boost our Internet presence with one of several of Yelp’s marketing programs,” he wrote. “Once I was finally able to get him to answer my question about what the price would be, I was staggered: $8,400 per year for their midlevel program. I politely declined.”

After that, Thomas claimed his positive reviews began to be filtered or “buried deep” within the site and “difficult to access.” Only positive reviews had been moved, he said. The more negative reviews moved up the page and were featured more prominently.

It’s pretty much the same story we’ve been hearing for a long time. One business owner even shared it with Judge Milian on The People’s Court:

Last May, Yelp defended itself after similar accusations from various business owners were reported by The Washington Post and the Los Angeles Times.

“Some business owners have even gone so far as to take these accusations to court, but their claims keep getting dismissed for lack of any fact-based evidence,” blogged Yelp’s VP Communications & Public Affairs, Vince Sollitto, at the time.

He pointed to research finding no connection between advertising and Yelp’s automated filtering.

With the data set employed, a Harvard Business School study found that “none of the advertise interaction effects are statistically significant,” and that “neither 1- nor 5-star reviews were significantly more or less likely to be filtered for businesses that were advertising on Yelp at the time we collected our dataset.”

It went on to conclude, “Yelp’s current implementation of the filtering algorithm does not treat advertisers’ reviews in a manner different to non-advertisers’ reviews. While we have no direct knowledge of how Yelp’s filtering algorithm works, the lack of filtering biases associated with advertising increases our confidence in using filtered reviews as an unbiased, albeit imperfect, proxy for fake reviews.”

You can find the report in its entirety here. Find section 3.4 for more details on the methodology.

“A simple Google search debunks the conspiracy,” Sollitto wrote. “Want to see if businesses that advertise on Yelp really do get ‘special treatment?’ Feel free to do your own version of a simple Google test like this [ ‘Yelp sponsor’ AND ‘rude staff’] by inserting your own negative phrases in the last set of quotation marks. The words ‘Yelp Sponsor’ only appear on pages of advertisers, which begs the question: if these Yelp advertisers get a special ‘Delete’ button for negative reviews, why in the world aren’t they using it? (Hint: because it doesn’t exist.) Nor is there any rational incentive for a Yelp sales team member to jeopardize his or her career by pitching a product that can’t be delivered because it doesn’t exist.”

Thomas says he’s not buying Yelp’s defense, and notes that many other small business owners who have filed a class-action lawsuit against the company don’t either. The case was dismissed, but is awaiting a decision in appeals court.

His article points to an NBC report from November about a dentist who claimed his negative reviews had been removed when he paid to advertise with the company, but reappeared when he told the company he no longer wanted to advertise.

Following Thomas’ article, The Seattle Times posted a letter to the editor from someone named Nete Olsen, who claimed, “I’ve also been extorted by the online reviews site,” and that the article “puts into words the exact experience that our business has gone through with the online review website.”

This week, the Times published another letter to the editor from Sollitto saying that both Thomas’ piece and Olsen’s letter “rehash a conspiracy theory that lacks evidence (see: Woozle effect).” He noted the Harvard study again.

“Yelp does not extort small businesses,” he continued. “We have been transparent with the fact that we do not recommend every review that is submitted. Why might a review not be recommended? It might be a fake, an unhelpful rant or rave, a review that the business owner asked a customer to write, or, simply, a review that was posted by someone we don’t know much about.”

“Let’s spend a moment on that last one,” he added. “We feel the most useful reviews come from active members of the Yelp community — those who regularly return to the site to share their opinions, who engage with other members of the community and share more information about themselves. After all, whose opinion would you trust more: a friend who you know is an expert in that given area, or a faceless stranger just shouting out a drive-by suggestion?”

Jeremy Stoppelman

Image via Jeremy Stoppelman (Twitter)

Yelp CEO Jeremy Stoppelman addressed the topic in a reddit AMA in November, saying, “Despite the ‘Yelp extorts’ conspiracy meme, there’s never been a shred of actual ‘smoking gun’ evidence (phone call recording, email, etc.) to back up the claims.”

As far as we know, he’s right. We’ve not seen any real hard evidence. Still, the accusations continue to fly, and businesses even go to Yelp events to voice their frustration.

Yelp and the U.S. Small Business Administration (SBA) have a new online reviews initiative, which will see even more events in various cities throughout the country this year, leading up to Small Business Week in May. We’d imagine that Yelp will face a few more unhappy businesses.

In a couple weeks, Yelp will release its Q4 and full year 2013 financial results, and will no doubt provide some stats on reviews and users. On the last one, they announced a 68% year-over-year increase in revenue and 42% year-over-year growth in cumulative reviews.

The extortion accusations are only one of the controversies Yelp continues to face. It also continues to battle fake reviews with “sting operations.” The company recently revealed that it has caught nearly 300 businesses engaging in fake reviews, resulting in their business pages displaying Yelp’s consumer alert messages.

Do you believe the “extortion meme” is a baseless conspiracy theory or do you think there’s a legitimate reason these accusations continue to fly? Share your thoughts in the comments.

Lead image via Yelp

  • Wise King

    Our medical practice was extorted by Yelp. Our Yelp presence was minor, consisting of only one 4 star review. My office manager kept informing me that Yelp, was calling to solicit advertising. I told her my usual “tell em I’m not interested” and within just a few months she pointed out negative reviews on the site. No problem I said. We have over 30,000 charts of happy patients, let em submit their own experiences. Lo and behold, since we declined to advertise, every positive review gets filtered even from those with an established Yelp presence (multiple reviews across the spectrum, lots of friends, check ins, compliments etc) while our 4 negative reviews (all from people with as few as just 1 review each and one we suspect from a non patient Yelp shill or competitor) are allowed to stand. Of course, we have chosen to ignore it and would never waste our money advertising at such exorbitant rates but it certainly upsets me that this sham is allowed to continue to operate while doing such great harm to small businesses.

  • Wise King

    If you read my Yelp story you will see that in my case, the punishment for not advertising was that all my good reviews are now buried while my bad ones, even from Yelp shills or competitiors we suspect, were written by people with no significant Yelp presence. Thus, their filter b.s. should be ignored.

  • Wise King

    It is a LIE. My Yelp bad reviews which stuck (punishment for me not adveritising) were posted by people with only 1 Yelp review, no friends, no check ins or comments. Clearly the filter rules they put out only apply in favor of those who have advertised.

  • Wise King

    Stoppelman is fully aware of the business model. The truth will eventually come out and all the harm and bad karma he has rained down on hard working small businesspeople will rain down on him.

  • Jeff

    I am completely frustrated as well. I have a cleint who has all negatives and a whole page of 5 stars that are current but now shown. Her business has been hurt by this process and we all suspect foul play. We have spend thousands of dollars to get them fixed and it is out of control. The algorithms is really just another word for “show me the money”!

    • doomedby2020

      How did you get yelp reviews “fixed”?

  • martinw392

    if you see a yelp advertiser shoot them a negative review, that will change their mind about supporting yelp with their advertising dollars, yelp hurts us we hurt them back fair is fair. The war is on.

    • doomedby2020

      Yelp is the mafia engaging in extortion and you suggest hurting the victims even more?

      Businesses cannot avoid a listing on yelp. And when yelp oppresses their business with bad listings, all the owners can do to survive is pay yelp for advertising so as to improve their yelp rating.. This is very real and it is happening.

      • martinw392

        yes I agree that businesses on line presence gets taken hostage by yelp, but businesses DO NOT have to support them with advertising dollars!! It does not matter weather you advertise or not yelp will let anyone slam your business with negative reviews, just look at the “yelp ads” they have lots of one star negative reviews in first place, don’t be fooled into thinking that yelp will help you if the reviews are hurting you,, and this, my friends, is their weakness, we need to exploit this. By giving advertisers negative reviews this will prompt them to close their accounts with yelp then if you don’t see them advertising any more you can delete your comments to not hurt them any more. I don’t want to hurt a fellow business owner either but by them supporting yelp it hurts me, then I will hurt back, If this happens often enough businesses will stay away from yelp…, people we NEED TO FIGHT BACK!! I can NOT take this crap sitting down!!! FUCK YELP!!

        • doomedby2020

          “…this will prompt them to close their accounts with yelp”

          Businesses cannot avoid Yelp. They cannot “close their account”

          In fact, they never asked to be listed. They had no choice.

          “”businesses DO NOT have to support them with advertising dollars!!””

          If yelp is driving their business into the ground, ruining their life, they will do anything to stay in business.

          What is your stake in this? Do you have a business? Have you been hurt by Yelp?

          • martinw392

            Fuck yelp!! Any Yelp advertisers will get hit with negative reviews, have some self respect and stop supporting and negotiating with the terrorist! Enough talk! time for action now!! FUCK YELP!!

  • doomedby2020

    “”Yelp denies it vehemently, citing a lack of evidence “”

    Plenty of evidence, no laws by which to prosecute Yelp.

    I had 9, five-star filtered reviews hidden on my listing. I can have all 9 of those clients give yelp proof they are the recipients of a bathroom remodel by me and that their reviews were genuine. Yelp is not interested in the truth, they have no appeals process.
    They took these reviews and left my only bad review. They did this in one day. They also did this after I declined to advertise with them for the sixth time.

  • doomedby2020

    Don’t you have to get back your job selling Yelp ads?