Are “Rating” Sites That Accept Ads Destined To Be Sued, Even For RICO? Welcome to the World of Yelp.com
What happens when a site which is suppose to be giving out unbiased reviews of products is accused of changing it reviews based on ad dollars?
Welcome to the world of Yelp.com, which was hit with a second class-action suit this week, alleging that they “extorted” companies by offering to hide bad reviews and promote positive ones in exchange for advertising.
The suit, filed by D’Ames Day Spa, in the federal district court for the central district of California, alleges that Yelp removed 13 of 14 positive reviews of her business from the site after she refused to purchase advertising on the site.
The suit goes on allege unfair and unlawful business practices and further allege that Yelp acted in violation of the Racketeer Influenced Corrupt Organizations Act.
Yes that a RICO allegation, serious stuff.
The CEO of Yelp, Jeremy Stoppelman said on Yelp’s blog: “This suit, like the other, is without merit, we will fight it aggressively and we believe we will win”
Of course there are always conspiracy theorist and business owners looking for explanations of why there services are rated low or their competitors are rated high.
Such is the danger of any any site that rates businesses while accepting ads.
It seems that lawsuits maybe part of the cost of doing business for such “rating” sites.
On the other hand with eyeballs comes a lot of power to make and break businesses especially restaurants which depend greatly on reviews and word of mouth.
We will see how this plays out in the courts, but this is definitely something to think about if your planning on developing any of your domains into this type of site.
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It’s common thing with big websites such as Yelp. Money talks $$$$
I have found that the majority of rating sites are very unreliable sources for reviews. Besides these problems with yelp you get very conflicting reviews that probably come from the owner of the business patting himself on the back and then the competitor down the street saying how crappy that same business is. All this done as customers who have supposed to had these experiences. Can all get very frustrating for the consumer.
This sounds like a slippery slope. Imagine if you will a Search Engine company, where in some sense the position in the search results might be viewed as a “Rating”. Suppose further that the Search Engine company sold ads as part of their business model.
The question might arise as to whether ad purchases have an impact on placement (ratings) in search results. Just sayin’…
In the Yelp case this will be an interesting one to follow.
For most niche business’s advertising on yelp does not work as well as it should because it is category based not keyword based. Hence the money you spend on Yelp is better off going toward a well crafted PPC campaign or SEO first. Once this is accomplished and optimized than you can move onto Yelp, CitySearch & Others.
Whether Yelp is in violation of the Racketeer Influenced Corrupt Organizations Act (RICO) will be determined by the courts.
I’ve heard and seen reviews disappear off yelp multiple times for multiple businesses. Some of these were suspiciously close to the points when said business was in conversation with Yelp about advertising.
However I like this quote from WSJ also: “These misconceptions are also fueled by lawyers, who may have heard about Yelp’s recent financing round and may be seeking a share,” he wrote.
Well, discovery should prove interesting…
Yelp! indeed.
if no one has filed a RICO aganist Nelson Brady (aka halvarez)why would any one ever think the feds would file in this example? just a headline teaser here I suppose?
Stewart
RICO has be filed as a criminal charge by the state or as a civil claim bought by plaintiff which this is the case here