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Advertising dollars are essential for many businesses to thrive in today’s economy. Yelp has been a platform where anyone can review businesses and recommend them to others, but has long been accused of gaming the system to sell ads, a practice that is at odds with its slogan: “Real People. Real Reviews.”

Several reports have surfaced that businesses that refuse to advertise with Yelp have been penalized. One incident in 2014 involved Dr. No’s Comics and Games SuperStore, a business in Marietta, Georgia, that was hit by the “pay-to-win” scheme. The store had averaged a 4.5 star rating on Yelp, indicating that it was a respected business in the community. However, after store owner Cliff Biggers refused to advertise with Yelp, he saw the average star rating drop. “Yelp didn’t even try to hide the fact that they were offering me improved ratings for ad payments. When I said no, our ratings began to drop,” he said on his personal blog.

Biggers likened it to a cyber version of a protection racket. “A Yelp rep contacted us and offered to improve our positive ratings if we would commit to monthly Yelp advertising for a year. Isn’t that pretty much the same as the old racket of paying a ‘protection fee’ to stop your business from suffering harm? That’s exactly what Yelp is doing to us, and I refuse to be blackmailed for positive ratings,” he said.

Racketeering is the act of fraudulently offering services to solve a problem that does not exist, will not be put into effect, or would not exist if the racket itself doesn’t exist. It is one of the most common forms of criminal activity, and is generally the work of organized crime. While it is illegal per the 1970 Racketeer Influenced and Corrupt Organizations (RICO) Act, a federal appeals court ruled that Yelp’s business practices regarding paying for positive ratings, which Biggers likened to a racket, weren’t illegal.

“As Yelp has the right to charge for legitimate advertising services, the (alleged) threat of economic harm is, at most, hard bargaining,” said Judge Marsha Berzon regarding the case Levitt v. Yelp! Inc. The 3-0 ruling in favor of Yelp has raised questions: are they playing by the same rules as all other businesses are? How trustworthy is a review system that offers higher ratings in exchange for money? Larger forces have been clearly at play, particularly when it comes to why certain reviews are filtered and others are not, a shady practice that Yelp vaguely explains in the below video.

Small business owners involved in a class-action damage suit against Yelp claimed that Yelp’s sales representatives told them their ratings were dependent on whether or not they would buy ads. “I’ve got hundreds of people who have called me with this problem: When they stopped advertising with Yelp, their good reviews got stripped out,” said Lawrence Murray, the lawyer representing these small business owners. “What does it take, to have a gun to their head? This is extortion in any other setting,” he added.

Yelp was quick to respond to the criticism, saying that their review filtering software did not distinguish between advertisers and non-advertisers. “For years, fringe commentators have accused Yelp of altering business ratings for money,” said Aaron Schur, the company’s litigation director. “Yelp has never done this, and individuals making such claims are either misinformed or, more typically, have an axe to grind,” he continued.

However, several plaintiffs have claimed that their five star ratings have disappeared after refusing an ad package from Yelp. San Francisco-based dentist Tracy Chan claimed that several five-star ratings have disappeared from her page, but were restored when she signed an advertising contract with Yelp. Other businesses have also pointed out that competitors had higher ratings because they bought ad packages. Analysts have stated that Yelp also has to maintain credibility with consumers just like any other business.

“On the surface, you’d think this news would be an endorsement for Yelp,” said Brian Blau, research director at Gartner. However, Blau indicated that the “pay-to-win” scheme Yelp is offering businesses is only the tip of the iceberg. “It could leave consumers wondering, if Yelp is permitted to do this, will they? They said they aren’t, but will they in the future? That’s going to be the bigger question,” he said.

By late July, reports surfaced that Yelp was in a “death spiral” when the company reported a second-quarter earnings loss. There were even allegations that founder Jeremy Stoppelman was intending to sell the company. Personnel changes at the company and outrage over Cecil the lion all came together to further damage Yelp’s reputation as a publisher of crowdsourced reviews. An upcoming documentary film, Billion Dollar Bully, intends to highlight Yelp’s dubious business practices.

Given the sudden disappearance of good reviews and the flood of bad reviews that small business owners are reporting when they refuse to buy ads, it might be time for Yelp to change their business practices before they find themselves filtered out of both consumers and businesses’ lives.

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