Behind the Ugly, Bitter, Name-Calling Yelp Lawsuit

Yelp is "a brain-eating corporate zombie," according to one startup.

Feb 27 2015, 9:40am

Photo: Yelp/Facebook

For the out-of-towner, Yelp is a dependable tool: It's a quick way to dodge food poisoning, surly waitstaff, or dingy bathrooms with only a few flicks of the finger. But for business owners, Yelp is a perennial battleground: A living, fickle platform where mobs can crown a modest​ fish joint king—or transform a hole-in-the-wall Chinese restaurant into a city-​wide joke.

Over Yelp's decade-long history, it has grown into a giant able to boost or shutter businesses no matter their size or location. It's little surprise, then, that startups enter Yelp's orbit, hoping to woo business owners with promises of glowing reviews. But the latest Yelp satellite—or parasite, depending on who you ask—has led to a heated law​suit.

Litigation is rarely tame, but this instance—filed by Yelp against the startup Revleap—is particularly fierce. Yelp accuses Revleap of "undermining [its] integrity," illegally using its trademarks, and defrauding businesses. And in a rebuttal, Revleap labeled Yelp a "brain eating corporate zombie." (Earlier this week, Revleap revised its statement and removed all references to the undead.)

The three-year-old Revleap promises clients a salvo of good reviews. Its tactics? Reaching out to business' customers directly via email, and identifying fans. Fans are then urged to share their thoughts on Yelp and other review sites.

Edward James, Revleap's CEO and co-founder, describes the company in innocuous terms: "[We're] very much just a platform for businesses to gather feedback from their customers," he told Motherboard. All reviews are penned by legitimate customers, he added.

Revleap's core team—James and three others—work from an office in Los Angeles. And since the lawsuit, Revleap has taken up another crusade, appointing itself the champion of small businesses who claim abuse by Yelp. (And there a​re many.) On a week-old GoFund​Me page, Revleap aims to raise $100,000 to battle Yelp in court (the company has raised $1,725 as of this writing). An earlier v​ersion of the page included a biting critique: "If Yelp eats us, they will continue to eat businesses everywhere. Please help us stop the brain eating corporate zombie and retain the best lawyer."

Yelp first learned of Revleap—then operating under the name "Yelp Director"—in 2013, according to Yelp spokeswoman Rachel Walker. Often, Yelp is tipped off about these companies by jilted customers, she said.

"We learn about these services from the businesses that are the targets, and unfortunately have seen instances where businesses are misled into believing that Yelp endorses such services," Walker told Motherboard. "We feel it's our responsibility to protect [customers] from companies that may not have their best interests in mind."

"They're degrading Yelp and they're degrading the customers' experience."

Yelp recently published a blo​g post attacking Revleap. "We hope that taking action against Revleap will put a stop to their misleading practices," writes a Yelp vice president, who also accuses Revleap of "[making] a dollar by taking advantage of unsuspecting small businesses."

It's a battle where neither company can claim the moral high ground, according to Paul Oyer, a professor of economics at the Stanford Graduate School of Business.

"Yelp seems to be against [Revleap], and for very good reason," Oyer said. "They're degrading Yelp and they're degrading the customers' experience, as well. What you want… is for the reviews to be as honest and objective as possible."

Oyer likens Revleap to the college admission counselor, that sly professional who can pull strings and spoil a democratic process. But Oyer also assails Yelp: "Yelp has been accused of [sins] itself," he said.

The lawsuit is also a fine example of the parasite economy, where one company's business model can live entirely inside another's, Oyer said. And while parasite economies predate the web—think custom, third-party accoutrements for sports cars—they've become more complicated.

"[In] the sharing economy and the internet, ratings are so important," Oyer said, referencing the likes of Airbnb and Uber. "I would be worried about anything that can degrade those systems."

On the sidelines of the lawsuit are those most affected: Small businesses. Molly Merrill owns Ski​pjack, a seafood restaurant in northern Delaware, and says Yelp is hardly perfect. Fired employees have sometimes taken to Yelp for retribution, she said, and Yelp doesn't always help. "Sometimes we can have those flagged or removed, but sometimes we can't."

Still, Merrill says she won't be a business that pays for a better Yelp experience—and she looks down on those that do. "It's unfair to the rest of us, but I suppose that's on their conscience, not mine," Merrill said.

"It's a battle where neither company can claim the moral high ground."

Currently, Yelp's lawsuit asks the court to transfer Revleap's domain names to Yelp, and also references a litany of fees—including restitution, damages, and attorney costs. A Yelp spokeswoman would not elaborate on the exact amount, or the lawsuit's timetable. But the filing makes it clear Yelp won't settle for just impugning Revleap's reputation—they want the company, and its fellow parasites, extinct.