Yelp Faces Extortion Claim, Class Action Suit

Feb. 26, 2010— -- "Real People. Real Reviews."

That's what Yelp, a popular Web site for reviews and recommendations, says it offers the millions of people who visit it each month.

But for some of the businesses targeted in those reviews, the site provides something else: Real problems.

Earlier this week, one California veterinarian took his complaints all the way to court.

Law firms in San Diego and Miami Tuesday filed a class action complaint with the U.S. District Court for the Central District of California, on behalf of Gregory Perrault, a veterinarian who owns and operates Cats & Dogs Animal Hospital in Long Beach, Calif.

The complaint alleges that Yelp, which is based in San Francisco, extorts business owners by promising to hide or bury negative reviews if they agree to purchase a monthly advertising subscription from the company.

"I don't have a problem with negative reviews. Like probably most business people, you use negative reviews to your advantage, as long as they're not emotional or making fun of [people]," Perrault told ABCNews.com. "It's just that I tried following their rules about the reviews and I've been [faced with] this extortion ever since."

Perrault said it started in September, when he and his staff noticed a negative review from a commenter named "Chris R." He said he was surprised by the man's disparaging account of his experience with the animal hospital and cross-referenced the information in the comment with the hospital's medical records.

When Perrault realized the actual experience took place in 2007, he contacted Yelp to ask that the review be removed as it violated the company's policy. (Yelp says comments must be posted within 12 months of an encounter with the business being reviewed.)

After a couple of weeks, he said, Yelp responded to him and subsequently removed Chris R.'s post. But a few days later, he claims another negative review appeared, this time from a "Kay K."

Since it was somewhat "threatening" and too vague to match against his records, he called Yelp asking that they take it down.

That's when he said he received the pitch.

If he paid $300 per month, he said a sales person said, "I'd have more control over my site and move things around and change the tagline on Google."

Uncomfortable with the alleged proposition, he said he declined.