Yelp Faces Second Extortion Lawsuit

Company CEO calls claims meritless

By Jackson West
|  Sunday, Mar 7, 2010  |  Updated 10:16 AM PDT
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The second lawsuit has been filed against Yelp in as many weeks, again alleging extortion.

Yelp, a  site that allows customers to rate and review businesses, is once again accused of promising to highlight favorable reviews and remove negative ones for businesses that purchase advertising. This time, D'ames Day Spa in Imperial Beach near San Diego is making the claim.

Yelp CEO Jeremy Stoppelman took to the official company blog to deny the claims, calling the latest suit "meritless" and accusing attorneys of trying to cash in on the company's recent round of venture capital funding:

These copy cat suits get filed in what is known as a "race to the courthouse," where lawyers jockey to be named the lead lawyer of the case and take the biggest share of legal fees; being among the first to file a suit increases the chance of being put in charge of the case.

Stoppelman also pointed out that the company admits in the lawsuit to soliciting reviews from customers. Yelp's software works to remove such "shill" reviews.

Of course, businesses that pay to advertise on Yelp can officially shill by getting a favorable place in local search results.

Photo by Flickr user Edopeno.

Jackson West has never written a review on Yelp.

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