Yelp adds to losses after WSJ column probes bad reviews, subpoenas

A WSJ column states most of the 2,046 FTC complaints filed against Yelp (YELP -5.9%) from 2008 through March 4 are "from small businesses that claim to have received unfair or fraudulent reviews, often after turning down a pitch to advertise on the site."

The column also notes Yelp has stated it gets an average of six subpoenas/month, some of which seek the names of anonymous users who have left negative reviews.

The Virginia Supreme Court is set to rule on a suit filed by the owner of a carpet-cleaning service whose business fell sharply following a spate of negative Yelp reviews, and which is seeking the identities of the reviewers. The case is being closely watched by Internet free speech advocates.

Yelp has freely admitted it has a fake reviews problem. The company has tried to deal with the issue by automatically filtering questionable reviews and tagging businesses proven to have posted or paid for fake reviews.

Shares are down 11% from Tuesday's close. They fell yesterday following the publication of an FTC letter stating the commission is giving the WSJ access to all but 9 of the aforementioned complaints, albeit with identifying information removed.

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Comments (7)
  • Stone Fox Capital
    , contributor
    Comments (9920) | Send Message
    interesting stuff, my guess is that all but a few of the complaining businesses aren't that good. Also, it wouldn't surprise me to hear that YELP had a few rogue salesman that tried to squeeze business for more ad dollars to juice commissions.


    Either way, I've never had a problem with the service and it has always been spot on with the reviews.
    3 Apr 2014, 01:15 PM Reply Like
  • PlatinumChip
    , contributor
    Comments (104) | Send Message
    It's about time, YELP has a predatory business model that is just a shake down scheme. All this company does is hurt businesses that don't pay and pump up those that play along. I don't see why Google and Amazon reviews can't grab this market and leverage the information rather than extort businesses. YELP will go to the wayside due to poor public opinion unless they change the model.
    3 Apr 2014, 02:06 PM Reply Like
  • alphaRAJU
    , contributor
    Comments (484) | Send Message
    Yelp needs to change their business model. How can you separate paying and non paying customers? Not fair. My friend had her good reviews deleted and the answer she got was " the computer took it out ". That was not professional.
    3 Apr 2014, 03:13 PM Reply Like
  • davidpaulbolt
    , contributor
    Comment (1) | Send Message
    Yelp is killing a lot of businesses. They are truly unethical in how the accept bad reviews and throw out good ones. They need to be sued. Many of my therapeutic boarding school clients have been severely hurt because the kids get online and say all kinds of falsehoods about these programs. Yelp posts those, but they won't post the good comments from their parents. So other parents are scared to death about putting their own child in the programs. Yelp has blackmailing our clients, saying that if they advertise, maybe they will be able to improve the reviews. it is pure extortion under the guise of freedom of speech.
    3 Apr 2014, 05:42 PM Reply Like
  • tess0926
    , contributor
    Comments (3) | Send Message
    They are unethical, they hide good reviews and maintain bad ones, anyone can enter a business site on there without a business permission, they refuse to take it down, all you hear about YELP are court hearings. They're always in Court fighting the core of their existence, "the business owner". This model is doomed to fail. If it wasn't for them going public to delay the inevitable this company will be toast and should be.
    6 Apr 2014, 01:10 PM Reply Like
  • Sandy Eggo
    , contributor
    Comments (92) | Send Message
    Yelp is a snake in the grass
    2 May 2014, 02:52 PM Reply Like
  • bapco16
    , contributor
    Comment (1) | Send Message
    I have 45 reviews. 44 of them are 4 or 5 stars, ONE is a poor 1 star review. YELP shows the one bad review and only one of the 5 star reviews, HIDING the other 43 great reviews. The one bad review was submitted by a guy in San Francisco (my business is in Cape Cod, MA) He claims he was treated badly in my business. I take reservations via deposit. I have NO RECORD of his name or any deposit from anyone in San Francisco. He claims I sold his fish (I run a charter boat) My state of MA requires all fish sales to be recorded. I have NO RECORD of any fish sales in that year or the year prior to his review. Yelp uses bogus reviews in their promoting of "Yelpers" and status inducing system of rating reviewers. Businesses are getting their reputations damaged by Yelp. It seems to be a shoddy business model.
    13 Apr 2015, 10:12 AM Reply Like
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