Yelp’s Controversial Business Tactics Contribute To 2,000 Complaints Received by FTC


Consumers head to Yelp to provide and/or peruse the praise and criticism left by other users about local businesses. But the tables have turned a bit with thousands of people taking their complaints about Yelp and its business practices to federal regulators.

Yelp’s stock price has fallen 12% since the Federal Trade Commission released a letter [PDF] detailing the company’s 2,046 complaints since 2008, Ars Technica reports.

The number of complaints might not come as a surprise to those who have followed the numerous lawsuits and allegations of extorting money from businesses to remove negative reviews. However, the company has steadfastly denied any wrongdoing or behind-the-scenes shenanigans.

A Yelp spokesman told The Wall Street Journal that the company receives an average of six subpoenas per month ordering the company to hand over information, often about anonymous reviewers.

For years, businesses have claimed that negative reviews pop-up on their Yelp pages after they’ve declined to purchase advertising with the company.

The Los Angeles Times reports that many small business owners say Yelp routinely uses bad reviews and competitors’ ads to persuade them to pay for service.

Business owners often say that if you don’t give in your likely to receive negative reviews prominently displayed on the business’ page.

One California jeweler told the LA Times that when he canceled his Yelp ad, a sales woman for the site contacted him to warn that competitors’ ads would now appear with his listing.

The importance of Yelp’s services has been questions numerous times, most recently by Travel Channel host Andrew Zimmern who called Yelp a “tremendous forum for a bunch of uninformed morons to take down restaurants.”

Last year, a New York Attorney General investigation found that 19 companies faked positive Yelp reviews in order to drum up business.

The lawsuits and controversy isn’t just reserved for Yelp, a number of companies have brought suit against reviewers for often negative reviews.

A Texas mother who took her child to a dentist, but wasn’t impressed with the service. She wrote a Yelp review explaining why. Soon after, she received a letter from the dentist’s attorney ordering her to take down the review or face a criminal charges of “internet business defamation and libel.

In another case, a shoe store allegedly banned a woman from the store after son made a negative Yelp review.

Yelp stock falls as FTC says it’s received more than 2,000 complaints about site [Ars Technica]

Yelp’s tactics feel ‘nefarious’ and ‘fishy,’ even if they’re legal [The Los Angeles Times]

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  1. ReverendTed57 says:

    “One California jeweler told the LA Times that when he canceled his Yelp ad, a sales woman for the site contacted him to warn that competitors’ ads would now appear with his listing. ”
    Competitors advertisements are shown on listings by default, so not having them displayed is one of the “features” of a Yelp advertising campaign. The flip side is that when you’re running an ad, your ad is displayed on the pages of competitors who don’t have ad contracts.