Producer Kylie Milliken is currently in production on documentary Billion Dollar Bully which is an  investigative documentary about Yelp that examines the claims by business owners of extortion, review manipulation and review fabrication.

Yelp, who is notoriously defensive, is not happy and has fired back in an unusual way.  Shannon Eis, vice president of corporate communications, went on CNBC’s “Fast Money,” where she went head to head with Milliken.  She revealed that she had several sock puppet accounts that she used to review her husband.   As you can see, they actually released a screen shot revealing her username, something they claim they don’t do as well as her husbands business name.   After looking at their privacy policy, turns out they are within their right to do this, because if you join Yelp you have no privacy.  They can do what they want with all of your information including giving it to 3rd parties and in this case use it to retaliate by releasing it to the public.

For a company who is trying to defend being called “mob like” and “Bullies” it is very surprising to see their reaction here.  What Yelp is telling people is that as long as you don’t upset them, you have nothing to worry about.  And its  telling us that they must be worried, otherwise why react at all.

The truth is I have more than one account.  If they looked at my IP they would see quite a bit.  Some are clients whose accounts I have created and claimed for them which is not against policy.  And some are accounts I set up to test out accounts I feel are blacklisted.

And I have a couple I have used for damage control.   I don’t feel bad about that at all.  When you have a website that is misleading your customers due to an admittedly imperfect filter system, we need to offset that damage.  If  Yelp removes valid reviews leaving up one fake negative one,  I personally feel a business has every right to do what they must to manage their reputation the way they see fit.

Notice how defensive Jeremy Stoppleman is when he feels anyone says anything incorrect? In fact Ms. Eis said they are responding to make sure that the facts are made clear.  Yet they tell businesses, so sorry, we realize our imperfect system has made you look bad, just focus on good customer service and move on.  And if you try to defend yourself in anyway, expect to be attacked.

Shannon Eis also accused her of ignoring all of the evidence that, according to Yelp, has long since discredited allegations of extortion, including a Harvard Business School study, a Federal Trade Commission investigation and numerous court cases in which federal judges found no evidence of wrongdoing.

First. The Harvard paper cannot be taken seriously.

One important fact that is left out is that Jeremy Stoppleman is a Harvard man.  If someone else from an entirely unrelated school writes a paper I might be more likely to trust it.

The Harvard Paper points out the power of a one star rating drop and also states that Elite reviewers are more trusted and are recognized as more reliable.  My previous post shows evidence that Elite are certainly NOT reliable and in fact can be quite damaging.

But if you combine the facts from the Harvard Paper and that of a Nielson Report you actually can see Yelps whole strategy.  The Nielson Report that was released prior to that which revealed “people are more than likely will leave a negative review than a positive one”.

So if businesses encourage satisfied customers to post positive reviews, the need to market their business via more traditional methods (advertising!) is reduced.  This explains why Yelp has to control businesses so much.

The FTC issue is also not to be taken seriously.  They have historically made mistakes and bad decisions or rulings.  The FTC ruling relating to Amway in the 70’s facilitated product based pyramid schemes.

They area also know to catch on slowly, and as CSPAN said “3 years too late”.  The FTC took forever to finally address all the complaints about DIRECTTV’s hidden charges. And they made numerous mistakes in regards to the Google complaints.

Even the FTC Chairman admits they aren’t perfect, “We’re not a regulatory agency. We’re an enforcement and policy agency, so it’s harder for us to set up rules in advance, so…you’re right…it’s a tricky question…responding to how do we make things better going forward as opposed to correcting mistakes a few years ago…we try our best using the tools that we have”.

And regarding the court cases, Yelp fails to disclose the whole story on some of these.

Yelp actually lost one case and was order to pay the plaintiff,  but then later after an appeal the judge dismissed the case.  Not because Yelp was right (in fact the Judge agreed they were like the Mafia) but because the terms say that you have to go through an arbitrator before court.  So the plaintiff simply made an error in how the case was handled.  The judge initially ruled against Yelp.

Yelp also was sued by a group of its own shareholders. They  filed a class action lawsuit against the company alleging that the Yelp executives sold of more than $81 million in “artificially inflated stock” while deceiving shareholders.

I for one am more than a little interested to see this film.  Anyone who has followed me over the years knows I have heavily disagreed with Yelp as I have witnessed the damage first hand.  It is frustrating to see Yelp dump huge amounts of money into legal fees and creating systems that hurt businesses rather than simply making some changes to the User Operations department so they can fix the issues they know the filter creates.  The problem is that it is hard to get review issues fixed even if it violates policy.  They don’t fix the issues they know exist.

They have an  imperfect computer system that they have had to spend a lot of money defending, that is responsible for our economy and our communities.

If they truly care about businesses like they say they do, they would find a way to integrate  a better system to offset that damage rather than fight against it.

My follow up articles on YELP:


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