Yelp, which helps visitors find local businesses through user reviews, is taking steps to address criticisms by small businesses — and to respond to a lawsuit that alleges extortion. The site said Monday that it will allow users to see reviews the site has filtered out, and advertisers can no longer post their favorite review at the top of a page.
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These changes, wrote cofounder and CEO Jeremy Stoppelman Monday on his company’s blog, reinforce the trust that led 31 million consumers to visit the site last month to find a great local business. The changes, he said, make it even more clear that Yelp treats review content equally for all businesses, with no connection between advertising and reviews.
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‘An Extortion Scheme’
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A key incentive behind the changes is a class-action suit filed in February in a California federal court, alleging that Yelp, according to the plaintiff, runs an extortion scheme in which the company’s employees call businesses demanding monthly payments, in the guise of ‘advertising contracts,’ in exchange for removing or modifying negative reviews appearing on the site.
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The plaintiff, a veterinary hospital in Long Beach, Calif., said it asked Yelp to remove a false and defamatory review, but the site refused. Instead, the hospital said, the company’s sales people kept demanding $300 a month in exchange for hiding or removing the negative review. The hospital also said similar practices by the site relating to other businesses have been documented in news stories.
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Yelp said the complaints were false.
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The company said its filter uses a secret algorithm to move users’ reviews from their own user pages onto business pages, in order to filter out fake reviews. Yelp said it continually tunes the filter to establish which of the registered users, who are the only ones allowed to post reviews, are the most trusted and…