For a review site like Yelp (YELP), the authenticity of its users' opinions is its most valuable currency.
That's why Yelp is suing the operator of several websites that promise to deliver positive reviews for local businesses seeking to boost their scores. Some companies "try to game the system and undermine" trust in Yelp's unbiased reviews, according to the lawsuit, which was filed last week in a federal court in California.
With the review business facing heightened competition amid a plethora of options, ranging from Angie's List (ANGI) to Zagat's, the veracity of a site's reviews has become increasingly important. Angie's List, for instance, has come under fire for allowing businesses to pay to get pushed to the top of search results, which critics say isn't always obvious to consumers.
Yelp's lawsuit claims the operator of sites such as Yelpdirector, Revleap and Revpley is seeking "to undermine the integrity of Yelp's platform."
The businesses allegedly are "based on fraudulent reviews, invasive spam, and conduct that otherwise violates the law as well as Yelp's Terms of Service," the lawsuit says. "The Yelp site has become one of the most popular business review websites on the internet because consumers trust that the reviews are genuine and unbiased. This established trust and goodwill is no accident."
Yelp invests "substantial resources" to make sure that fake, altered or fraudulent reviews aren't placed on the site, according to the lawsuit.
Alec Farwell, one of the owners of Revleap, said in an email to CBS MoneyWatch that its service is "legal in all aspects of the law, and we specialize in only legitimate reviews from real customers. Yelp has filed completely false and unsubstantiated claims against our company. We aim to decrease defamation and increase awareness of free speech for businesses. We level the playing field for everyone who uses the internet or reviews on any site."
The lawsuit adds that these businesses promise services such as filtering or removing low-rated Yelp reviews, and that they've expanded their practices even after Yelp asked them to stop. But it's not clear the businesses promising positive reviews were actually able to make good on their promises.
Yelpdirector, for instance, allegedly offered to sell "4 and 5 star" Yelp reviews for a monthly fee, while also claiming to have invented software that allows those reviews to "stick to the front page of Yelp." Yet according to the lawsuit, Yelpdirector had "no ability to get good reviews to 'stick to Yelp' and have no ability to 'remove bad reviews.'"
In a Yelp blog post, the company said offers of "reputation management" that promise better reviews on the service "are scams" and that the lawsuit was a way for it to take a stand. It noted: "Some business owners unfortunately fall for them and end up paying dearly, both with their bank accounts and their online reputations."