UPDATE: The plot thickens.
Last week, Prost Productions announced a new documentary project called Billion Dollar Bully. The film, which is about half shot, looks at those Yelp “extortion” accusations that have been swirling around for at least the past six years.
Do you plan on watching the film when it’s released? Let us know in the comments.
We had the chance to get some questions answered by director Kaylie Milliken, who told us, “As previous consumers of Yelp, we were and continue to be interested in highlighting business practices involving claims of extortion, review manipulation and review fabrication. This documentary will examine these claims, the rulings of the court in which Yelp won, and why Yelp won those cases.”
In response to the allegations, Yelp often (including last week) points to a study from Harvard Business School, which it says “debunks the allegations that Yelp provides preferential treatment to advertisers.”
Asked about the study in a recent interview with International Business Times, Milliken said, “I know there is that Harvard Study, but I just don’t have a lot of faith in it at this point.”
On what she thinks the study got wrong or didn’t adequately address, Milliken tells WebProNews, “If you look at the Harvard Business Study, the very first line asks the question, ‘Do online consumer reviews affect restaurant demand?’ This is the focus of the study – whether or not reviews actually hurt the restaurants. Yelp points at it as though the study was done to show review manipulation does not happen. Next, if you look at the arguments the author of the study makes, his first point is this: each star rating attributes 5-9% increase in revenue. (Therefore, if negative reviews do drag down the star rating, the business is negatively affected.) Next point: it is only independent restaurants (not chain) that are harmed in this.”
“This study focuses solely on restaurants,” she adds. “However, it is not just restaurant owners crying foul on Yelp. Business owners from across the spectrum are criticizing Yelp. This study only looks at restaurants, and only a sample study in Boston at that. Additionally, it does state that restaurants are hurt more by what Yelp ‘elites’ say than what other reviewers say. Many businesses have said Yelp Elites come in and act like it’s their right to have free products.”
A couple months ago, Yelp announced that the FTC had ended an investigation into its business practices without taking action against the company. Yelp touted this as another victory in the ongoing battle against claims against it. Asked about this, Milliken says it will be addressed in the film, but that she’d prefer to wait until the release to discuss it.
In its own defense, Yelp also points to the U.S. Appeals Court dismissal of cases brought against it with extortion claims.
“The dismissal was made due to the Communications Decency Act, which came about in 1996,” Milliken tells us. “It was also known to legislators as the ‘Great Cyberporn Panic’. This law came to be when people were trying to figure out how to regulate porn online. I’ll get into the nitty-gritty of this in the documentary.”
Here’s the legal document from that (courtesy of Marketing Land):
At the time, some in the media pointed out that the reason for the case’s dismissal didn’t really prove that Yelp hadn’t engaged in some of the things it was accused of.
As Nathaniel Mott at PandoDaily put it, “Yelp’s extortion charges have been dropped, but that doesn’t mean the company’s innocent…the court’s decision was based less on Yelp’s innocence in the common sense of the word and more on the fact that these businesses never had a ‘right’ to positive reviews in the first place. Yelp isn’t necessarily innocent — it’s just not guilty in a way the appeals court cares about.”
Courthouse News Service reported: “Yelp’s alleged conduct cannot be called extortion because its ‘manipulation of user reviews, assuming it occurred, was not wrongful use of economic fear, and, second, … business owners pled insufficient facts to make out a plausible claim that Yelp authored negative reviews of their businesses,’ the three-judge panel found.”
Also from that report:
“In sum, to state a claim of economic extortion under both federal and California law, a litigant must demonstrate either that he had a pre-existing right to be free from the threatened harm, or that the defendant had no right to seek payment for the service offered,” wrote Judge Marsha Berzon for the three-judge appellate panel. “Any less stringent standard would transform a wide variety of legally acceptable business dealings into extortion.”
As you know, these stories from businesses about Yelp’s so-called “extortion” business practices have been going around for a long time. They’ve been discussed in the media time and time again, even having been brought up on The People’s Court one time in an unrelated case. We asked Milliken if Billion Dollar Bully will expose any hard evidence that hasn’t been discussed in the media before.
“I’m really excited about the opportunity to present material that very few have seen and give a voice to those who haven’t been heard,” she says.
Once news of the documentary emerged last week, Yelp began trying to discredit Milliken. The company told Business Insider:
The director has a conflict of interest, as she has a history of trying to mislead consumers on Yelp. There is no merit to the claims they appear to highlight, which have been repeatedly dismissed by courts of law, investigated by government regulators, including the FTC, and disproven by academic study.
We reached out to Yelp for additional comment and details about this “conflict of interest” and misleading of consumers. A spokesperson told us the company would not comment further at this time, which as I mentioned before, is interesting, because typically Yelp has no problem calling out specific businesses about “shady business tactics”.
Asked about what the company is referring to, Milliken tells WebProNews, “I honestly have no idea what they are referring to, but I welcome any information they have.”
In the IBT interview, she mentioned that she has a husband who owns a small business and that he has complained in the past about how pushy Yelp salespeople can be.
Asked about this, Milliken tells us, “He didn’t experience the behaviors that I’m reporting on; he was just annoyed with the incredibly frequent and pushy calls. He said he always felt he had to be very polite with them because he had heard about Yelp’s tactics and didn’t want his page to go down that path.”
Milliken has indicated the inspiration for the investigation and documentary came from a story she heard from her physician.
We also asked her if she thinks (based on what the businesses she’s spoken with have told her) that Yelp salespeople are using language on phone calls that play to this “extortion” narrative, but that is maybe phrased in a way that keeps it from being held accountable. We also asked about common, specific things she’s heard from multiple sources.
She replied simply that, “This topic will be addressed and light will be shed in the movie.”
So far, she says she hasn’t felt any pressure from Yelp itself since announcing the project.
“They haven’t reached out, but I hope that they do contact me and agree to an interview on camera,” she says after noting in the IBT interview that the company agreed to answer questions via email, but wouldn’t let her record a phone call or go in with a camera.
Milliken says she has spoken with a “wide variety of businesses and consumers who had all sorts of opinions and experiences with Yelp” for the film.
Should Yelp appear on camera and talk about the subject in the film? Do you think they will if the project meets its funding goal? Discuss.
Update: Both Milliken and Yelp VP of Corporate Communications Shannon Eis appeared on CNBC to talk about the allegations and the film.
Image via YouTube