Is Yelp A Bully Or Just Misunderstood?

    The online reviewing behemoth is regularly accused of Mafia-style extortion by disgruntled business owners and the media. But even as Ivy League researchers debunk the conspiracy theories, the company’s shadowy reputation remains intact. Why is it so hard to believe that Yelp might actually be fair?

    Salakjit Hagerty's story is typical. Archetypal, even. Thousands of hardworking independent business owners have told, and still tell, the same heartbreaking tale. Only the details vary. This is the point.

    Two and half years ago, she held a grand opening for her Thai restaurant in San Francisco's Hayes Valley. The next day she went online and saw what any new business owner craves: a long scroll of five-star Yelp reviews. Soon after, though, she began noticing those positive reviews were disappearing from her business's page. Some regular customers even told her that they'd written raves that also disappeared.

    During this time, she began receiving calls and emails from Yelp salespeople soliciting ads that run between about $300 and $1,000. Believing the two things were connected — declining to buy ads and the positive reviews disappearing — Hagerty and her husband hung a sign in the restaurant's window:

    Stop the bully. Boycott Yelp. Our customers tell us they've submitted very good reviews of our food and service. Yet, they never show on our reviews. We asked Yelp, we were told, "Perhaps if you paid to do Yelp ads, we could help you with this."
    Los Angeles Times columnist Sandy Banks happened to walk past Bai Thong Thai and saw the sign. Intrigued, she found they weren't alone in believing Yelp was extorting them. As Banks wrote in her April 20 column: "Hundreds of disgruntled business owners have accused Yelp of tweaking its review system in order to prod low-rated companies to advertise on its site." Banks' column was picked up by the Huffington Post, Eater, SFist, others. A picture of the sign went viral.

    Indeed, the internet is teeming with these claims. You see it at or the Facebook page We Hate Yelp, or, ironically, Yelp's page for itself, which boasts a three-star overall rating, dragged down by livid small business owners seeking comeuppance. The company's been subjected to several class-action lawsuits, at least one of which included an extortion allegation. A Freedom of Information request last year released nearly 700 Federal Trade Commission reports filed against the company, a good portion of which use the words "extort" or "extortion."

    It's a sensational notion; unsurprisingly Banks wasn't the first to raise it — East Bay Express, PBS' Mediawatch, Wired, Bloomberg Businessweek, and the Washington Post have published similar, scolding pieces. A narrative was cemented: Yelp is a Goliath, a bully. Or to use the metaphor favored by many, the mafia: You pay for advertising or it kills your business. This is how we want, or need, to think of the faceless, monolithic tech companies upon which we're dependent. But what if that's completely wrong?

    The Hagertys can't actually prove they were extorted; nor can, it seems, any other small business owner who's made this claim. When interviewed, the Hagertys won't even say that the claim their sign made is in fact true. Salakjit Hagerty, who talked with the Yelp salesperson, does not speak English well. Larry, who wrote the sign, admits he was never on the phone with anyone from Yelp. Does he definitely know what was said to his wife? "I can't say definitely because I didn't speak to them," he says. At first he says "every" positive review of the business disappeared from the site; when reminded Yelp only contacts businesses with three-star overall ratings or higher, he goes silent.

    "We have as much right to put the sign in the window as Yelp does to have a website," he finally says. "Her intent was never for it to get this far."

    Some may find all the fuss a bit silly. But Yelp's influence is not to be understated: The site and app receive 102 million unique visitors each month. It's estimated they have 39 million reviews of 1.1 million businesses. Every other second someone calls a business via the app alone. It's now reached into nearly every domestic market, plus 21 foreign nations and counting. A Google comparison demonstrates that for every 97 searches on Yelp, there are 10 for UrbanSpoon and zero for CitySearch.

    Such ubiquity has consequences. A study from last year found that a measly half-star difference made it 19% more likely that a San Francisco restaurant would be busy at peak times. The converse is also true: Bad Yelp ratings can be fatal. Businesses have no choice but to be listed on the site; they have no control in what's said about them, nor how results are ordered or filtered. With that lack of control comes anger. And with anger comes misinformation.

    For better and for worse, strangers' opinions affect our purchasing behavior to an unprecedented degree. Such feedback, of course, is easily corrupted. Websites like Yelp face the problem of whether and how to scrutinize the data they receive to ensure reliability. On one extreme, Angie's List features reviews of local products and services provided by and visible to its fee-paying members. On the other, Urbanspoon and CitySearch, Tripadvisor, and Amazon don't really scrutinize reviewers or reviews. While more democratic, they're also much more susceptible to manipulation and therefore theoretically less useful to consumers. If a business owner or her friend or someone she pays can pose as a happy customer — or sabotage her competition — a review is no more useful than an ad.

    Arguably, the reason that Yelp is successful is because of its unique solution to the problem of review corruption: its contentious filter, which suppresses 20% of the content submitted to the site. The company explains the filter's purpose and method in a hurriedly narrated video that's illustrated with stick figures resembling South Park's Terrence and Phillip. It opens by telling Yelp's foundational myth: Founder and CEO Jeremy Stoppelman had recently moved to San Francisco and he wanted to find a good doctor. "While there was plenty of information around, it wasn't always information you could trust," the narrator rushes to explain. "Way back when the web came around in the '90s, a bunch of sites popped up that tried to offer local reviews but with no real means to guarantee those reviews were completely legit."

    In the video, the filter resembles Willy Wonka's Everlasting Gobstopper machine. Reviews tumble in, the good stick to a business's page, and the bad are lifted away. Because the filter is constantly evaluating all the information on the site — and the filter itself is being adjusted and updated by its engineers — which reviews are filtered is fluid. A few years ago, Yelp began allowing businesses and consumers to view which results have been omitted. Generally speaking, they look a little specious — mostly five stars or one, and tending to come from accounts that have submitted little or nothing else to the site. That said, it's not a perfect system, which Yelp admits. Like the Everlasting Gobstopper recipe, the filter's workings are shrouded in secrecy.

    Because no one knows how the filter works, substantiating the extortion claim in court has proven impossible. Lawsuits that have gone after Yelp for other things — what reviews say, or how it orders results — have also been dismissed. Internet attorney Eric Goldman explains why this is: Yelp is not liable for the content on its site. (Though individuals are.) This is per a 1996 law that provides immunity from liability for providers of an "interactive computer service" that relies on user-generated content.

    "In 1996, there were very few companies to speak on behalf of the internet," Goldman explains; he's been practicing and teaching internet law since the '90s. How has the law been updated to reflect the fact that this is no longer the case? "Not very much," he says. "There's now a group of companies that will fight very aggressively against any structural change, and they have some muscle. And the people who object don't have the same muscle."

    Goldman explains that class-action suits attempting to circumvent this law in various tricky ways will be recognized as such by a judge and dismissed. In certain states, there are also what are called anti-SLAPP — strategic lawsuit against public participation — laws that punish folks who've attempted such suits against "socially beneficial speech," which includes information about businesses and consumers' opinions.

    But there is something else going on here. "In the last five to 10 years, a group of plaintiffs' lawyers has developed that specializes in suing internet companies," Goldman says. "They wait for companies to get money and they think, How can we get that money?" and are run by the same woman, Adryenn Ashley. The Reno-based, self-described "mediagenic... award-winning actress and filmmaker" and "mentor to CEOs worldwide" includes her biography several times on, in which she titles herself a "Business Architect" at her consulting company, Wow! Is Me. She's a blonde whose smiling face greets you at the top of the page, pointing to the phrase "Everything A Small Business Owner Needs To Build a Profitable Small Business." consists of four pages: a blog where Ashley posts entries such as "Yelp Is Ruining My Business" or "How to Oustmart Bad Reviews on Yelp"; a page called "Delete Yelp Account," which is deceptive, because while you can delete a user account, you can't delete a business's page; "Resources," where she acknowledges, for example, banner ad providers and web hosts she utilizes; and the "Tell Your Yelp Story" page, where frustrated small business owners congregate to repeat, again and again, the extortion claim.

    Ashley, though, was not one such business owner; she was instead an enthused Yelp user whose account was closed in a 2008 "raid" targeting users Yelp believed were review trading — saying positive things about one another's businesses. Most of those, like Ashley, were involved in the entrepreneurial communities Ladies Who Launch, eWomenNetwork, and ENI.

    "We were some of the first on," she says. "We were rabid fans. We thought it was great." According to her, there were a few who had traded reviews; she and many others had not. Yelp called Ashley and the others "spammers." They took down all her reviews. "No warning, no nothing, they just deleted all my work," she says. Ashley messaged back and forth with Stoppelman, whom she says stated that there was a conflict of interest. She admits she had written reviews for businesses that she not only patronized but for which she was doing consulting, but that wasn't and isn't a violation explicit in Yelp's terms of service.

    "Within five days, I had five national negative news stories about Yelp calling into question their very dictatorial stance," she says proudly. In those days, she was "raising media awareness" for a living, so this was not difficult. Also in that time frame, she says, she launched both websites. She claims she doesn't have a financial stake in the lawsuits, but rather maintains to put small business owners in touch with attorneys: "I am basically Switzerland, strictly a clearing house." Though she's blogged about search engine optimization, she also denies that her consulting company Wow! Is Me has benefited by attaching her brand to the search phrases "yelp sucks" and "yelp lawsuit." She calls both sites "philanthropic" projects.

    "In college I worked on a rape crisis line, and you would get phone calls from people who were desperate," she says. "They had nowhere to turn, they were crying, and you were there to answer the phone. Yelp doesn't answer the phone. I get those calls from business owners who've lost their businesses."

    Mostly, though, she still seems motivated by that initial insult and the deletion of her reviews: "Clearly I'm still pissed because they never apologized," she says. She adds that if they ever met her "list of demands" — she claims to have literally sent a list — not only would she end her campaign, she would go to work for them.

    "You know why? Because there's no one on the inside advocating for the business owners, and I would advocate for them."

    And yet in her five years of leading the anti-Yelp crusade, Ashley admits she doesn't know of anyone who can prove they've been extorted.

    This would not surprise Harvard Business School professor Michael Luca, who has co-authored a new study that effectively debunks the extortion theory. He's studied Yelp for a number of years, and is generally interested in exploring how the crowdsourced review revolution has affected consumer and business decision-making. For this study, he partnered with Georgios Zervas, a post-doctoral fellow in computer science at Yale University. Their goal was to "unmask," in Luca's term, what kinds of data are generally caught in the Yelp filter. "Part of this controversy comes from the fact that there's absolutely no transparency," he explains.

    "We identified a few key situations where there would be the highest likelihood of leaving a fake review," Luca says. From a previous study, they knew that independent small businesses are more affected by Yelp than chains and thus have more to lose. "What you find is that businesses are more likely to solicit positive promotional reviews when their reputation is not very strong," Zervas says. "I mean, very simply, they've received negative reviews or they have very few reviews on Yelp." (Bai Thong Thai fits all of these criteria, and Salakjit Hagerty admits that the positive reviews that were filtered were written by customers who were also her friends.)

    Now that they had a better understanding of what kind of information the filter targets, Luca and Zervas took on the extortion claim, examining whether businesses that advertised appeared to be treated differently by the filter than those that don't. "We just see that there's no difference across the two groups," Luca explains. "The fact that we didn't see it is at least suggestive that it's not that substantiated."

    Luca says he's thought a lot about why the extortion claim nonetheless persists. He believes the main reason is a lack of "a firm understanding of how Yelp works." This was certainly a trend amongst the dozens of independent business owners who spoke about their problems with Yelp for this story, including those who'd left their names with the FTC and many on the Listserv. Some didn't get why Yelp had a page for their business, for example, seeing as they didn't create it. Yelp claims, and the law agrees, that information about businesses is public.

    And then there's the filter. Christine O'Sullivan, whose family owns a moving company in Michigan, hadn't known about Yelp until she noticed the negative reviews people had been leaving on it. When she realized there were positive reviews that had been submitted but weren't appearing, "I was really upset," she says. She still can't see how "a computer could figure out what's good and what's bad. There's just no way that that could be reputable, you know?" Distrust of technology — especially given Yelp's secrecy about its filter's workings — was a common theme.

    Many were frustrated that they couldn't correct Yelp when they discovered instances of what they knew were legitimate reviews that had been filtered, even though that would run completely contrary to Yelp's attempt at having an automated, impartial system. This was especially true of businesses whose owners know relatively well who their clients are, like a Berkeley piano store owner, a Newark, N.J., furniture restorer, medical professionals. Many, like Julie Ruggles, owner of Julie's Pooch Pad in Vienna, Va., even tried to get Yelp to unfilter results she knew were legitimate. "I gave them contact information for everyone that wrote a review, and then they didn't follow up with it," she explains.

    Amid this confusion, another trend emerges: Yelp's sluggish response to even legitimate complaints. Ruggles says that the negative review that was dragging her down seemed to be about dog grooming — a service she does not provide. She claims that even after Yelp acknowledged the review violated their terms of service because it wasn't based on a first-person account, it was four months before they took it down. Or Paul Koumanelis, who owns a Nashville pizzeria, tried to contact Yelp for months about reviews he believed were false. When he finally got someone on the phone, he says, "They laughed at me, laughed at me."

    Yelp won't disclose the size of its support team; it's safe to assume it may not be big enough to deal with all the business owners who are frustrated with the company, legitimately or not. Yelp Senior Public Relations Manager Kristen Whisenand did try to talk up the company's effort in educating small business owners, describing staff tasked with traveling the country and holding informational town halls for business owners, though she admitted only two employees are doing that. Whisenand was also unable to say whether the company does — or intends to — educate small business owners who aren't, for example, native English speakers or tech-savvy.

    While it does have a fairly exasperated-sounding Myths page, it's not hard to intuit why Yelp hasn't devoted much of its energy to small business owner education. "Business owners" aren't a homogenous group. They're of diverse national origins, native languages, characters, business acumen, worldviews, education, and computer literacy levels, and many of them have, most importantly, already decided, they hate Yelp. Further, many have read the stories, heard about the lawsuits, or visited sites like Yelp-Sucks and therefore feel validated in their beliefs. Yelp devoting real resources convincing them otherwise seems futile, especially considering that the company hasn't yet turned a profit.

    If a business owner tries to contact Yelp, he or she will find that the people easiest to actually get on the phone are ad salespeople. One former so-called "Account Executive" characterizes the environment inside the Manhattan office as very "positive," meaning there was a lot of pressure to make a sale. (He declined to give his name for this story.) He says when you were on the phone with a small business owner, you always wanted to make the conversation about how "buying Yelp ads would solve all their problems." That said, he says he and his coworkers couldn't have, for example, punished a business that had declined to advertise. Even they didn't know how the filter worked; it was a source of constant speculation around the office. While in theory, he explains, a business that advertises on Yelp will likely have more customers who've come to them via Yelp and therefore more (theoretically positive) Yelp reviews, the mafia conspiracy "is absolutely untrue."

    "I think there's going to be a perception of conflict of interest," Luca says, whenever advertising and non-advertising content are mixed. "My guess is that businesses that have a one-star review filtered after a call from an advertiser don't make that connection, whereas businesses that have a five-star review filtered after the advertising call make that connection."

    So the problem seems to boil down to scale. An event so tiny as to be imperceptible to Yelp — the longevity or brevity of a single unfiltered review, for example — may mean the difference between making rent, laying off an employee, paying a mortgage, going under. It makes sense that people take it personally. It makes sense why this belief — Yelp is the mafia — survives, despite hard evidence to the contrary.

    Yelp shouldn't and doesn't seem to want to replace professional criticism; it only turns up the volume on what the public believes, for better and for worse. (And what the public believes can be laughable, as Real Actors Reading Yelp demonstrates.) Ultimately, as any good business owner knows, you cannot please everybody; you can only hope you do a good enough job to please most of the people most of the time. You can only hope that the data eventually reflects this, filter be damned.

    If you're one of the millions of consumers who turn to Yelp when looking for a dry cleaner or French bistro or a churro within walking distance, you're probably relieved to learn they're not sinister shakedown artists. Yet many small businesses have and will continue to suffer because of Yelp, which is perhaps why the mere existence of the Elite Squads — regular people who love Yelp so much, they devote tons of their time to it — remains polarizing.

    The first Elites came around in the company's early days, 2004 or '05, when a group of early adopters met up at a San Francisco bar. Before long, the company had seized on this marketing opportunity and institutionalized the Squads. Today there are several dozen, in cities big and small around the country and world. Each is led by a community manager who coordinates with local small businesses to throw boozy soirees. "They basically work for parties," one former Elite Yelper described them.

    As they enter a SoHo cocktail bar, the Manhattan Elites are each handed company name tags — first name, last initial. They're mostly in their twenties and thirties, still dressed in office attire.

    Yelp maintains an air of secrecy about the Elites, refusing to disclose how many there are or how to become one. That there are limited spots means Yelp has turned reviewing small businesses into a competition, even though there are livelihoods at stake. One Elite Yelper mentions that his parents had owned a Chinese restaurant when he was a kid. Even so, he doesn't think about the small business owner, or the kid in the back doing homework, when he reviews restaurants today.

    "My primary focus is the chef and the food," he says.

    There is no grand welcome. No speeches made, no cult agenda laid out. The Elites just mingle, like coworkers or wedding attendees. The tables have been lined with Yelp wristbands, Yelp Chap Stick. There is a platter of kale chips and a bowl of punch one cannot help but notice resembles Kool-Aid.

    Among those drinking it is the woman who almost shouts, "The filters are great!" and goes on to dismiss those who don't like it as "newbies." Or the woman who claims, "Without Yelp I wouldn't have a single friend in New York City!" Or the one who, when asked about those who criticize Elites, does a baby-sucking-lemon routine. They, like domestic Yelp users overall, skew young, college educated, and well off. But the easiest blanket characterization to give Elites, when you meet them in person: They are a chipper bunch.

    Consensus is, this is how to become Elite: You participate a lot, and in a way that encourages others to participate a lot. Yelp wants them to be community oriented and to compliment reviews or dub them "cool," "funny," or "useful." Their plentiful reviews — which aren't filtered — also skew positive. When Yelpers are attacked by the media for being nitpicky or demanding, the company's spokespeople like point out that the majority of the reviews on the site overall are four and five stars; this seems especially true of the Elites'. One motivation the company might have in keeping the data positive is that its salespeople only cold-call businesses with three-star overall ratings or higher.

    The risk of this is that some businesses become, as one Elite terms it, "Yelp anointed." Especially because some people are driven to become Elite, there's a tendency to pile on additional glowing reviews to businesses that have already been reviewed hundreds, even thousands of times. The reverse is true as well: A negative review from an Elite Yelper for a business that has not been heavily written about has that much more impact.

    One Elite Yelper mentions that though he writes reviews, tons of them, he doesn't use Yelp himself, for exactly this reason. "At a certain point, it reaches a critical mass, and value depreciates," he explains.

    And maybe this will be Yelp's eventual downfall. Or maybe a competitor will figure out how to distinguish between reliable and unreliable reviews in a way that's more effective, or just more transparent, than the way Yelp does.

    Manhattan Community Manager Ruggy Joesten, who organized this event like he does all the ones in the area, interacts with a lot of small business owners day to day. He takes pleasure in helping them better understand how to best use Yelp, how to message customers who've left negative reviews. He says he enjoys doing this because even if Yelp disappeared tomorrow, something like it would rise in its place. There's just no going back to the Yellow Pages.

    "I feel terrible when I see those news stories like the Thai food owner in San Francisco who gets national media attention because she thinks we're extorting her, who thinks we're trying to put her and her family out on the street," he says. "Come on. Are you fucking joking?"