Class Action Lawsuits

Yelp is off the hook, again. A judge has thrown out a class action lawsuit filed against Yelp that alleged the company tried to extort small businesses by promising to remove negative reviews in exchange for money. When the suit was first filed in February 2010, the plaintiffs — which included a veterinary hospital in Long Beach, California — claimed that Yelp’s sales team said it would remove a “false and defamatory review” only if the vet bought advertising at about $300 per month. As CNET points out, that original suit was dismissed earlier this year and the plaintiffs were given a month to refile, which they did. Now it’s been dismissed again. In a blog post today, Yelp CEO Jeremy Stoppelman called the lawsuits “misguided” and said he’s “pleased” that the lawsuit was dismissed with prejudice today, meaning it can’t be refiled. While we were confident that Yelp would ultimately prevail because we knew the allegations were false, it is helpful to have the matter resolved early so we can put these allegations behind us. This isn’t the first time Yelp has been hit with accusations of wrongdoing. (And may not be the last.) From reading numerous articles over the years, anecdotal evidence suggests that Yelp’s sales staff can be overly aggressive in courting small business owners, while also unable to explain to small business owners why certain reviews remain on their Yelp business listing and others are filtered out — not a good combination for communicating with many SMBs. Adding to the confusion was that Yelp used to offer advertisers the ability to promote positive reviews on their profile pages — a feature that Yelp finally killed in April 2010, just a couple months after this class action lawsuit was originally filed. Yelp better have a good Class Action Attorney!