Yelp`s Controversial Tactics Brought About 2,000 Small Business Complaints Disclosed by FTC

Many small businesses continue to state that they have been hit with fraudulent or unfair reviews on Yelp sometimes just after turning down salesperson`s suggestion to advertise on the site (NB: Yelp denies that the advertisements has any influence on reviews). Business owners often express their frustration in article comments and Yelp`s events. The company has successfully won multiple lawsuits filed against Yelp for “extortion” as there were no evidences confirming complaints.

In response to a Freedom of Information Act appeal from the Wall Street Journal`s writer Angus Loten the FTC has disclosed the information about complaints against Yelp. In particular, the commission received 2,046 complaints from 2008 to March 4, 2014. The precise nature of the complaints is not revealed but in the past small businesses have ventilated the accusations concerning Yelp, which presumably hurt their ratings by publishing only negative reviews about their companies and extorted money to erase them. However, Yelp has steadfastly disproved any wrongdoing or shenanigans.

According to the FTC letter major part of complaints from business owners contain Do Not Call requests. In essence, the letter discloses that complaints state that Yelp salespeople continue to call the involved businesses even after they were asked not to do it and try to extort them for advertising dollars. It should be mention that only a part of complaints invokes the concept of “extortion”.

Yelp`s mechanism flagging dubious and shady reviews was has long been considered confusing and controversy among business owners. The ambiguity surrounding its process and the “filtrating” of positive reviews by Yelp has invoked dissatisfaction and fueled multiple conspiracy theory. However, Yelp has a vital interest in securing against fake or fraudulent reviews.

Yelp has tried to explain to small businesses the algorithm of its “review filter”. However, as we see it needs to do a better job to eliminate the kinds of complaints.

Since the FTC revealed a letter, disclosing 2,046 complaints against Yelp the company stock price has fallen 12%.

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