Yelp Gets Sued for "Extortion"
Last December, we published a post titled Whoever Buys Yelp Will Inherit the Lawsuits. At the time, Yelp was in talks to be acquired by Google, although it later opted for a $100 million investment from Elevation Partners (including $75m in secondary liquidity). It also was the subject of several defamation-related lawsuits from local business owners. As we wrote: Yelp generates extremely strong feelings among business owners, especially in San Francisco where it started. Some love the review service. But, for awhile, there was a steady drumbeat of negative media stories about Yelp that were usually generated by disgruntled business owners who would call reporters and complain, often anonymously because, they said, they feared backlash from Yelp. Accusations that Yelp would allow business owners to pay Yelp to manipulate their reviews and put the good ones on top were never proven, but some business owners were convinced that it was happening, and it was never clear from the outside exactly how Yelp operated. The company has an algorithm to sort and cull reviews that it says it is constantly working to improve. Well, now there is a class action lawsuit directly addressing the "extortion" complaint. It was filed yesterday in Los Angeles, by law firms Beck & Lee (Miami) and The Weston Firm (San Diego). The plaintiff is a Long Beach, Calif.-based veterinary hospital that claims
