Yelp CEO Responds to Class-Action Lawsuits Alleging Extortion
Yelp has been the subject of fairly continued grumblings, some louder than others, that its ethics are less than stellar–and last week, the user-generated reviews site got hit with an official class-action lawsuit making those grumblings legal accusations. Even worse, yet another (very similar) lawsuit just emerged, accusing Yelp of the same underhanded tactics. Today, Yelp’s CEO, Jeremy Stoppelman, responded on the official Yelp blog.
Essentially, the rumors of ethical misconduct all come back to a “pay to play” tactic: Yelp offers to remove or downgrade negative reviews if the business in question purchases advertisements on the site. That’s extortion, plain and simple, and if true, it does a huge disservice to the users who rely on Yelp. In the past, businesses have quietly accused Yelp of using this illegal tactic, and users have come forward to voice their concern. It hasn’t been taken to court, but accusations have gotten specific enough to name the exact dollar amounts supposedly demanded by Yelp. But that is the first lawsuit that’s actually been filed, and so Yelp is taking it very seriously–there have been four blog posts in the past two weeks defending the site.
Today’s example features CEO Jeremy Stoppelman calling the claims “false and easily refuted” and “without merit,” and accuses the lawyers involved of persuing a “frivolous” lawsuit purely for a cash settlement. He even notes that the suit came in the wake of Yelp’s latest round of financing, and that the plaintiffs may just be trying to cut themselves a piece of that cash.
These misconceptions are also fueled by lawyers, who may have heard about Yelp’s recent financing round
and may be seeking a share. So it’s no surprise that today another
lawyer has filed a virtually identical lawsuit making the same
inaccurate claims. (Don’t worry; they’re still not true.)
Stoppelman admits no guilt or shades of grey in the post, stating “we will fight [the suit] aggressively and I believe we will win.” He’s quite confident throughout the post, despite the fact that these rumors have dogged Yelp for years. From the tone of the article, it seems like Yelp could rather take it to court than try to settle beforehand–we’ll keep you updated as to when the next step is announced.
[Via Yelp]