This week Yelp! Inc. the online review site was served with a class action lawsuit in California for Violations of California’s Unfair Competition Statute. The complaint filed in the US District Court for the Central District of California, alleges that that Yelp! manipulates reviews, which have a direct impact on business ratings, and then offers to remove them if the business purchases a monthly advertising subscription. The Plaintiff, Cats and Dogs Corp, provides veterinary services in Long Beach California and claims that it was extorted by Yelp!
Yelp!, a San Francisco based operation which was founded in 2004, recently walked away from Google’s $550 million dollar offer to purchase. These allegations however strike to the heart of Yelp! Business model which claims to provide “real people and real reviews.” To date, Yelp’s response to the complaint has been a statement denying the allegations.