Martin Zurada, a San Francisco attorney who has represented several collision repair companies in different capacities over the years, is currently in the process of putting together a civil suit on behalf of Gene Crozat, owner of G&C Auto Body, with seven locations in Northern California.
Zurada has been watching the Yelp situation for quite some time and he believes the website is manipulating its review system to benefit itself and generate increased revenues as a result.
“As a business owner, the Internet has a lot of power, obviously, because people are Googling, Yahooing and Yelping all the time and looking at your business online,” Zurada said. “We know that people are going to read the reviews, but the business owners are rarely given an opportunity to respond to any of the reviews or comments being posted, or at least test these claims online.”
Zurada questions the accountability of a site that allows anyone to post reviews without offering a chance to question their reasons. “The motives of these customers are never discussed in these reviews.
For example, you might have a disgruntled vendor who is upset with you because you didn’t pay them on time, and so now they’re writing bad reviews on Yelp. An angry customer will write a negative review and it could potentially be there forever. You can’t respond to the validity of these claims, so the only way a business owner can get satisfaction is via the legal route. But, it’s a long and expensive process to take them to court and collecting is even more difficult.”
Suing Yelp successfully is a tricky proposition for many reasons, Zurada explained. “Some businesses have tried to sue them, but the problem is that the content provider is merely posting what someone else is saying. They have a certain degree of immunity based on basic Internet laws, so Yelp is not directly liable for items posted on their website. If everything online was contested, of course, there would be no Internet, so they have to be protected to a certain degree. If they’re posting someone else’s claims, we have no issue with that. But, with Yelp passively accepting, organizing, and indexing these opinions from the community, what they’re doing is essentially manipulating content in such a way to make money. At that point, they’re no longer a passive content provider. Now they’re actively disparaging your business. Many companies, including body shops, have encountered a situation where Yelp will call them or visit their business and tell them if you sign up, we will help you. It just seems like businesses who don’t sign up with them have more bad reviews appearing more often while positive reviews seem to disappear.”
Zurada has encountered this scenario more than once, he said.
“With G&C, we’ve seen it happen—favorable reviews of Crozat’s shops fall off after 30 days, while a small handful of unfavorable reviews are still listed there from 2008, for example. I don’t know what Yelp’s secret algorithm is, but it allegedly detects reviews that are real vs. fake ones. It seems that companies who won’t sign up with Yelp have more bad reviews and when good ones are posted, they identify them as fake. Good reviews are suppressed and bad ones stay there forever. That’s our main issue with Yelp. Yelp denies it and says they’re neutral, but there has been some considerable litigation against them already along this vein.”
Zurada is in the process of researching former civil suits that have been filed against Yelp, in order to devise the best strategy, he said. “We’re in the process of analyzing these other suits, to see how they were approached and what was either successful or not in pursuing Yelp.
“Of course, Yelp has gotten very good at defending these cases, so it’s not an easy task. How do you prove damages? Yelp defends itself by saying, hey, we don’t know how these reviews actually affected your business, because you can’t prove who stayed away based on bad reviews or not. Potential customers might not choose your shop, because they don’t like the photos of your facility or any of a hundred other reasons. It’s a lawsuit of some definite complexity, but Yelp is not immune to being sued and if they are manipulating this data to make profit, they’re liable for it and body shops need to be remunerated for their damaged revenues.”
Recently, a group of 66 business owners filed a lawsuit against Yelp, alleging that the website has been running an “extortion scheme” and has “unscrupulous sales practices” in place to generate revenue. They claim that Yelp’s representatives regularly call businesses demanding monthly payments in the guise of advertising contracts, in exchange for removing or modifying negative reviews. The companies involved in the litigation contend that Yelp informed them that bad reviews would disappear by signing an advertisement agreement with the site.
One of the plaintiffs in this current law suit against Yelp is John Mercurio, the owner of Wheel Techniques, a 25-year-old company that repairs and does in-house cleaning, polishing and custom painting of wheels in Santa Clara, California.
It all started with a phone call, Mercurio explained. “The people at Yelp contacted me and told me if I purchased an advertising plan with them, they’d help me to get rid of the bad reviews or at least get them knocked down the list,” he said. “But, when I told them no way, they immediately removed a total of roughly 50 5-star reviews off my page. We were looking at Yelp.com while we were talking to them, and within a few minutes the positive review that was formerly at the top was gone and a one-star review suddenly appeared in its place”
Mercurio felt used and was very upset at what he saw as a kind of extortion. “It was pretty obvious to us that they’re in control and what can we do? In my opinion, the laws haven’t caught up to the Internet yet, and that’s why it’s hard to sue them and even tougher to win.
“We’ve got a ton of proof, because we’ve been documenting everything along the way and I pull reports from Yelp twice per week. They filter my reviews so that my overall rating sits at 2.5 stars. One week, I received three reviews that were all at 5 stars, yet my rating remained at 2.5, because I won’t buy advertising from them. The 5-star rankings are taken off all the time without any reason, and these are 100% legitimate customer reviews. We need to prove that Yelp’s so-called automated system is bogus, and we have evidence that some of these reviews were done manually. They wanted $1,000 per month, which is ridiculous. Yelp has cost me a lot of business, up to a one third, I estimate. I know for a fact that a lot of people look at our Yelp reviews every month, so it has hurt my business in more ways than we can ever know.”
Shawn Saidi owns Active Auto Body in Sunnyvale, Calif., a highly successful shop located in a 13,300 square-foot facility and fixing 75–90 vehicles monthly. He is also the current president for the Santa Clara Chapter of the California Autobody Association.
Saidi says Yelp brings him customers, but he is also wary of the site, for several reasons. “They actually generate a lot of business for us. Customers tell us that they see us on Yelp all the time. Most of our reviews on their site are excellent, but we have a few that are really bad. One was from a customer who brought his car to us around five years ago. About three months ago he wrote a lengthy review that reads like a novel. When you read his review, you can see that we tried to do literally everything we could to make him happy. But, five years later, he’s still not satisfied. A few months ago, we let an employee go and right after that, we got a bad review that was obviously written by this vengeful former employee. It contains a bunch of false information, but there it sits for all to see.”
Saidi isn’t a social media expert, but he can clearly see that something is peculiar in the way his reviews are managed by Yelp, he said. “I don’t know how their system works, but we’ve had more than 100 positive reviews taken off. One of our customers called me and told me that they put his positive reviews aside. This is a legitimate customer and we’ve repaired two of his vehicles, so why are his comments deleted? So, we contacted Yelp and asked them why. They told us that their system goes through the reviews to analyze them for authenticity. If it’s a 5-star review and the user has never posted before, it gets set aside. Then, they tried to sell me advertising—again!”
The anonymity of the reviews on Yelp protects the users, but it also creates a situation fostering unaccountability, Saidi, he explained. “If one of my customers has an issue with one of our repairs, we can sit down and rectify it. I’m not going to email the person, sharing comments back and forth—I’d prefer to sit down with them and handle it properly person-to-person. We always do whatever we can to make it right and we’re proud of our work, but if they’re only commenting online and won’t bring their vehicle back, we can’t help them.”
Yelp was invited to respond to this story but declined to do so.
Next month: How can you defend your reputation when it’s been disparaged online?
Law Offices of Martin Zurada
785 Market Street, Floor 16
San Francisco, CA 94103