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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 an alleged "pay to play" tactic. Yelp is accused of offering to remove or downgrade negative reviews if the business in question purchases advertisements on the site. If that's true, a judge could agree that it sounds exactly like extortion or, at the very least, a huge disservice to the users who rely on Yelp. In the past, users have quietly come forward to voice their concerns and frustrations with the tactic, but accusations are now specific enough to name the exact dollar amounts supposedly demanded by Yelp. And this is the first lawsuit that's actually been filed, 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 pursuing 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 gray 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 would 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]