You are on page 1of 39

I THE WESTONFIRM

GREGORYS.WESTON(239944)
2 JACKFTTZGERALD (257370)
888TurquoiseStreet
3 SarDiego,CA 92109
4 Telephone:(858)488-1672
Facsimile:
(480)247-4553
5 g.eg@westonlirm.com
jack@westonfllm.com
6
BECK& LEEBUSINESS
TzuALLAWYERS
7 iAREDH. BECK(233743)
8 ELIZABETHLEE BECK (233742)
Courthouse
PlazaBuilding
9 28 WestFlaglerStreet,Suite555
Miami,FL 33130
1 0 Telephonei (305)789-0072
Iaosimiler(786)664-3334
1 1 jared@beckandlee,com
1 2 elizabeth@beokandlee.com
t 3 Attornevsfor Plaintiffsandtho ProposedClass
14 UNITf,D STATESDISTRICTCOURT
CtrNTRALDISTRICTOF CALIFORNIA
t)
CaseNoi 2:l0-cv-01340-VBF-SS
1 6 CATSAND DOGSANIMAL }IOSPITAL, Pleading
TyperClassAotion
lNC,j ASTROAPPLIANCESERVICE;
t7 BLEEDINGHEART,LLC d,6/A
BLEEDINGHEARTBAKERY; FIRSTAMDNDEDCOMPLAINTFOR:
18 CALIFORNIAFURNISIIINCS, INC,dfulA
SOFAOUTLET;CELIBRE,INC,;J.L, EXTORTION;
19 FERRIENTERTAINMENT,INC, d,6/A
ADULT SOCIALS;LE PETITE ATTEMPTEDEXTORTION;
20
RETREATDAY SPA,LLC; SAN
FRANCISCO BAY BOATCRUISES, INTENTIONAL INTERFERNNCE
2l LLC
WITI{ PROSPECTIVD
d,/b/a
MERMAIDSCRUISE;WAGMY BUSINESS
22 TAIL, INC.; andZODIAC RESTAIJRANT ADVANTAGE;AND
GROUP,INC. d,6/aSCION
23 RBSTAUR,{NT, on behalfof themsclvcs VIOLATIONSOF THE UNFAIR
andall otherssimilarlysituated, COMPETITIONLAW, CAL. BUS&
24 PROF.CODES 17200.
Plaintiffq
25 DEMAND F'ORJURY TRIAL
26
Defendant.
27

FIRSTAMENDEDC0MPLAINT
1 PlaintiffsCatsandDogsAnimalHospital,Inc., Astro ApplianceService,
2 BleedingHeart,LLC dlbla BleedingHeartBakery,CaliforniaFumishings, Inc.
3 d,rblaSofaOutlet,Celibrd,Inc.,J.L.Feni Entefiainment,
Inc. d/b/aAdult Socials,
4 Le PetiteRetreatDay Spa,LLC; SanFranciscoBay Boat Cruises,LLC d,6/a
5 MermaidsCruise,Wag My Tail, Inc. andZodiacRestaluant
Group,Inc. d/b/a
6 ScionRestaurant,
on behalfof themselves
andall otherssimilarlysituated,by and
7 through undersignedcounsel,hereby sue DefendantYelp! Inc. and, upon
8 information
ard beliefandinvestigation
ofcounsel,allegeasfollows:
9 JURISDICTIONAND VENUE
10 l. ThisCourthasoriginaljurisdictionunder28U.S.C.g 1332(d)(2)
(The
u ClassActionFairness
Act) because
the matterin controversy
exceeds
the sumor
1 2 valueof$5,000,000
exclusive
ofinterestandcostsandmorethantwo-thirdsofthe
l 3 members
of the Classresidein statesotherthar thatstateof whichDefendant
is a
l 4 crlizen.
l5 2, Venueis properin thisCourtpursuant
to 28 U.S,C.$ l39l because
at
1 6 leastonePlaintiffresidesin andsufferedinjuriesasa resultofDefendant's
aotsin
1 7 thisdishict,manyofthe actsandtransactions
givingriseto thisactionoccunedin
1 8 thisdistrict,andDefendant
(1) is authorizcd
to conductbusiness
in thisdistriotand
l 9 hasintentionally
availeditselfof the lawsandmaxkets
of this districtthoughthe
20 promotion,marketing,and saleof adverlisingin this district;(2) residesin this
jurisdictionin thisdistrict.
2 I district,and(3) is subjectto personal
22 PARTIES
23 The Non-SponsorPlaintiffs
24 3. Plaintiff Catsand DogsAnimal Hospital,Inc. ("CatsandDogs") is a
2 5 California corporationwith its principal place of businessin Long Beach,
26 Calitbrnia.
27
I 4. PlaintiffAstro ApplianceService("Astro")is a soleproprietorship
2 licensedby Califomia Stateand SanMateo County,with its principalplace of
3 business
in SanCarlos,Califomia.
4 5. Plaintiff J.L. Feni Entertainment,
Inc. dkla Adult Socials('Adult
5 Socials")is a New York corporation
with its principalplaceof business
in New
6 York, New York.
7 6. PlaintiffLe PetiteReteatDay Spa,LLC ("Le PetiteRetreat")is a
8 Calilbrnialimitedliabilitycorporation
with its principalplaceof business
in Los
9 Angeles,California.
10 7. Plaintiff San FranciscoBay Cruises,LLC dlbla MermaidsCruise
l l ("MermaidsCruise")is a Californialimitedliabilitycorporation
with its principal
t 2 placeofbusinessin SanFrancisco,
California.
13 8. Plaintiff Wag My Tail, Ino. ("Wag My Tail") is a Califomia
I 4 corporation
with itsprincipalplaceofbusiness
in Tujunga,California.
15 9. Plaintiff Zodiac RestaurantGroup, Inc. d/b/a Scion Restaurant
1 6 ("Scion")is a Washington,
D.C.corporation
with its principalplaceof business
in
l 7 Washington,
D.C.
t8 TheSnonsorPlsintiffs
l9 10. Plaintiff Bleeding Heafi, LLC d/b/a Bleeding Heart Bakery
20 ("BleedingHeart Bakery")is an Illinois limited liability corporationwith its
2 1 principalplaceofbusiness
in Chicago,
Illinois.
22 I l. PlaintiffCalifomiaFurnishings,
Inc. d,rblaSofaOutlet("SofaOutlet")
23 is a Californiacorporation
with its principalplaceof business
in SanMateo,
24 California.
25 l, Dr^:-+:.r/r-r:L-j r-^ /'rcelibrd")is a Califomiacorporation
r rglnr! lwIrUIwt rtl!. \ with its
26 principalplaceofbusinessin Tonance,California.
27
1 Defendant
2 13. DefendantYelp! Inc. ("Yelp") is a Delawarecoryorationwith its
3 principalplaceof business
in SanFrancisco,
California.Yelp ownsandoperates
4 Yelp.com,
a popularonlinebusiness
directoryanduser-ratings
website.
5 INTRODUCTIONAND BACKGROUND
6 14. Theterm"Web2.0" describes
internetwebsitesandapplications
that
7 revolvearoundinformationsharinganduser-centered
design.Examples
of Web
8 2.0 websitesincludesocialnetworkingsites(e.g.,Facebook.com),
videosharing
9 sites(e.g.,YouTube.com),
wikis (e.g.,Wikipedia.com),
blogs,and manyother
1 0 sitesthatallowusersto create,upload,or modirycontent.Web2.0 websites
thus
l l allow intemetusersto do muchmorethansimply retrieveinformation-the users
1 2 choosewhat informationto interactwith, how they interactwith it, and how to
t 3 modifyor addto pre-existing
content.
t4 15. Onlinereviewapplications popularform of Web
arean increasingly
l 5 2.0.Companies
suchasAmazon.com,
BestBuy,andTripAdvisor,com
embedWeb
t 6 2.0 applications
within their websites,which allow usersto tate productsand
1 7 services
andsharetheirexperiences.
l8 16. Yelp.com,a wcbsitcowncdand opcratcdby DefendantYelp, is a
l 9 websitethatutilizesWeb2.0user-website
interaction.
20 17. Yelp.comconsistsof an onlinedirectoryof businesses
in multiple
2T categories,
muchlike an onlineYellowPages.Eachbusiness
listedon Yelp.com
22 hasa uniqueYelp.comlistingpage,whichprovidesbasicbusiness
information
23 (suchasaddress,
phonenumberandhoursofoperation),
anduser-generated
ratings
24 andreviews.
25 18, To rateard reviewbusinesses,
intemetuserssimplyregisteron the
26 Yelp.comwebsite.Any internetuser (whetherregisteredor not) can browse
27 Yelp.comto find ratingsandreviewsofbusinesses.

FRSTAMENDEDCoMpLAntT
1 19. Ratings-based
websites,
includingYelp.com,arehighlypopular,and
2 havegrealpowerto directthe flow of commercein a givenarea.Usersfrequently
3 readratingsandreviewsfor all ofthe businesses
in a particulax
category
andlocale
thendecidewhereto spendtheirmoneybasedonthoseratingsandreviews.
5 20. Yelp,however,
regularlymanipulates
the contenton Yelp.comlisting
6 pages,despiteYelp'smantraof "Realpeople.Realreviews."As a result,business
7 listingson Yelp.comare in fact biasedin favor of businesses
that buy Yelp
8 advertising.
9 21. As partofYelp's regularpractices,
thecompany
asksbusiness
owners
1 0 to payfor "protection"frombadreviews(in theformof adverlising
dollars)while
1 l Yelpcontrolswhetherbadreviewsarepostedin thefirstplace--theclassicscheme
1 2 of offering"proteotion"
froma problemthatthe"proteotor"
himselfcreates.
13 GENIIRALFACTUAL ALLEGATIONS
t4 TheYelp Business
Model
l5 22. Individualbusiness
listingsontheYelp.comwebsitearecreated
when
l 6 either(a) Yelp employees
or othersworkingon behalfof Yelp or at Yelp's
t 7 direction,
createa newlistingfor a business
(oftenaroundthetimeYelpentersinto
1 8 a newgeographical
market),(b) rrviewersnotassociated
with Yelpcreatea listiug
1 9 for a business
while, at the sametime,becomingthe first personto reviewthat
20 business,
or (c) a business
creates
itsownlisting.
21 23. Businesses
maynotoptoutofbeinglistedontheYelp.comwebsite.
22 24. Yelpallowsbusinesses
listedontheYelp.comwebsiteto registerfor a
23 free"Business
OwnerAccount,"whichprovides
ownerswith:
24 (") theabilityto trackhowmanypeopleviewtheirpage;
25 (b) the ability to updatebusinessinformation(suchashous
26 ofoperation);
and
27

FIRSTAMENDEDCoMPLAI'IT
1 (c) a limitedabilityto sendmessages
directlyto a reviewer
2 (for example,respondingto a review), although
3 reviewers
canchoose
to disablethisfeature.
4 25. Oncea business
listingis created, on yelp may
individualsregistered
5 rateandreviewthebusiness.
6 26. Individuals
registerontheYelp.comwebsiteby creating
anindividual
7 profile,muchlike a profileon popularsocialnetworkingsiteslike Facebook.com.
E The protile allows individualsto choosea screennameand uploadphotos,
9 includinga profilephoto.Theindividual's
reviewsarelistedwithinhisprofile,arrd
1 0 the profile has other funotions and information such as "Friends" and
1 1 "Compliments."
12 27. Individualswho createprofilesmay do so anonymously
by usinga
1 3 niokaame
or "handle,"andby not includingphotosof themselves
in theifprofiles.
t 4 Anonymous
usershavethesamerightsto postratingsandreviewsofbusinesses
as
t 5 namedusers.
16 28. Any individualintemetusers,whetherregistered
on the Yelp.com
l 7 websiteor not,maysearch
theYelp.comdirectory,
viewratings,andreadreviews.
18 29. Business
ratingsaremadeon a one-to fivc-starscalc,with onestar
1 9 beingthelowestrating,andfive starsthehighest.
20 30. In additionto ratings,reviewers
mustprovidea writtenreviewof the
2 l business.
22 31. Businessownersmay not publicly (i.e., on their Yelp.comlisting
23 page)respond
to reviews.
24 32. Registered
Yelp usersmay,but arenot requiredto, voteon wfltten
25 reviews,rating them as either "Useful," "Funny," or "Cool." There is no
26 negatively-spun
votingcriterion,suchas"Not Useful,"or "ThumbsDown."
27

FIRSTAMENDEDCoMPLAr.rr
I 33. Yelp purpoftsto restrictratingsand reviewswhich constituteor
2 contain(a) conflictsof interest,(b) second-hand experiences or hearsay,(c)
3 personalattacks,(d) inelevantmaterial,(d) plagiarism,or (e) whichareleft btank.
4 34. Yelp alsopurportsto "suppress"
"a very smallnumber',of reyiews
5 whichits "automated
software"determines
arelikelyto be"fake."
6 software"asits .,a1gorithm.,,
35. Yelprefersto this"automated
7 36. "Suppressed"
reviewsremainwithinYelp'ssystemandarelistedin a
8 registereduser's profile. Thosereviewsaxe not, however,displayedon the
9 reviewedbusiness's
Yelp.comlistingpage,exceptthat whena registered
useris
1 0 logged-in
to Yelpandnavigates
to theYelp,comlistingpageofa business
thatthe
l l userreviewed,the review appea$for that useronly. Thus logged-inusersare
t 2 unableto determine
whentheirreviewshavebeen"suppressed."
Whilethepublic
l 3 seesoneve$ion of the business
listing(theversionwith the reviewsuppressed),
1 4 the reviewerseesa differentversion(the versionwherethe reviewappears
to
1 5 remainintact).
16 37. TheYelp.comwebsitedrawsinternetuserswith thepromisethat,by
1 7 conglomerating
reviews of individualswith firsrhand experiences
of local
1 8 businesses,
the site offersan objcctivcmnkingof competingbusinesses
through
l 9 whichuserscandetermine
therelativequalityof a business
whendecidingwhere
20 to spendmoney.Yelp's mantraembodying
this promiseis "Realpeople.Real
2 1 reviews."
22 38. A business'srankingon Yelp.comhas immensepowerto direct
customeneitherto or awayftom thebusiness.
While Yelp'sreadership
hasbeen
climbing,the websitecurrentlyenjoysas least29 million hits per month,and
25 includes
at least8 millionreviews.
39. Yelp'sonlystreamofrevenueis tfuoughthesaleof advertisements
on
27 theYelp.comwebsite.
1 40. Compensation
ofYelp'ssalesforceis oneofYelp,slargestexpenses.
2 41. Yelp'ssalespersonnel
arepaid,in pafi,throughcommissions.
3 42. As a result,thereis immense
pressure
on Yelp salespersonnel
to sell
4 advertising
subscriptions.
5 Yelp Sponsors
6 43. Yelp offerssomebusinesses
advertising
subscriptions,
whichvary in
' 7 costftom
$150to $1,000permonth.Withthesubscriptions,
businesses
receivean
8 "enhancedprofile," and between1,500and 10,000targetedads per month
9 depending
onthelevelofsubscription.
l0 44. Yelp refersto businesses
that purchase
adverlisingsubscriptions
as
1 1 Yelp"Sponsors."
12 45. Businesses
may becomeSponsors
only if they havea significant
1 3 numbetofteviewsanda minimum3-starraXing.
Consequently,
everySponsor
was
I 4 favorablyreviewedby a majorityof Yelpreviewers
beforebecoming
a Sponsor.
15 46. Yelp sellsadvertising
throughthe promise,expressor implied,that
lo Sponsors
will seetheir Yelp.comratingincreaseand-more impofiantlyto the
1 7 business
owner-that the business patronage,
in turn will seeincreased business
profit.
l 8 and,ultimately,
t9 47. The increased
ratingYelp promisesis attributable
to a numberof
20 "favors"Yelpprovidesto a business
in exchange
for becoming
a Sponsor.
2I 48. Yelpadmitsto providingsomeofthesefavors,including:
22 (a) The ability to chooseor highlight q49 favorite review,
23 whichwill appear
andremainat thetop of theSponsor's
24 listingpage;
25 (b) The privilege of showingup first in searchresultsfor
26 similarbusinesses
in theregion;
27

FIRSTAMENDEDCOMPLAT.]T
1 (c/ Adsfor theSponsor
appear
on competitors'
listingpages,
2 while competitors'
adsdo not appearon the Sponsor,s
listingpage;
4 (d) Theabilityto posta photoslideshow;
5 (e) The ability to add a "personalmessage"abouttheir
6 business;
7 (D The ability to updateinformationon speoialoffers and
events;
and
9 (g) Accessto an accountmanagerwho will help"maximize"
i0 theSponsor's experienoe
with Yelp,
11 49. YelpprovidesSponsors
with additional
favorsincluding:
12 (a) Removing or relocatingnegative reviews, thereby
IJ affectingtheperception qualityrelative
ofthe business's
14 to its competitors;
l5 (b) Creatingandpostingpositivereviews,therebyaffecting
t6 the perceptionof the business's
qualityrelativeto its
l7 competitors
;
18 (c) Allowing the businessownu to dctcffiinc thc order in
19 whichreviewswill appear;
20 (d) Allowingthebusiness
ownerto choosea "tagline"to be
21 displayed
onthebusiness's
Yelplistingpage;and
22 (") Ensuringnegativereviewswill not appearin Googleor
23 othersearch
engineresults.
24 50. Becausethesefavorsaredesigned
at increasing
a business's
rating,
25 theydo not stronglyincentivize
businesses
whichalreadyenjoya four-or five-star
zo rating.
27
1 51. Thus,Yelp hasan incentiveto keepmostbusinesses
in a three-to
2 four-starratingband-enoughfor a business
to qualifyfor Sponsorship,
but not
3 enoughfor a business
to besatisfied
with its mting(andthusnot needto purchase
4 a Sponsorship).
5 YelD Non-SDonsors
6 52. Althoughmanybusinesses
do not advertise
on Yelp,theterm"Non-
7 Sponsor"
asusedin this Complaintrefersonlyto thosebusinesses
to whiohYelp
8 offeredpaid advertisingsubsoriptions,
but which deolinedto purchaseany
In otherwotds 'Non-Sponsors"
9 advertising. could hqyebecomeSpotsors,out
l 0 elected
notto.
l1 53. Non-Sponsors
seepositivereviewsdisappear
fiom their Yelp.com
1 2 listingpagessoonafterdecliningto become
a YelpSponsor.
13 54. Non-Sponsors
seean increase
in the numberof negativereviewson
1 4 theirYelp.comlistingpagessoonafterdecliningto become
a YelpSponsor.
tf 55. Sometimes
suchnegativereviewsarefalse,for example,concerning
1 6 seruices
or goodsnot offeredby thebusiness,
or purportingto be fromcustomers
1 7 ol patients
whoneverpaftonized
thebusiness.
l8 56, Such false negativereviews arc sonetines generatedby Yelp
l 9 personnel
or otherswho act on behalfof Yelp or at Yelp's direction,or who are
20 compensated
in someformby Yelp.
21 57. Althoughsuchfalsenegative
reviewsviolateYelp'sTermsof Service,
22 Yelpregularlyfailsto removesuchreviewsfor Non-Sponsors.
58. At times even "true" negative reviews violate Yelp's Terms of
Service,for exampleif they attackbusinessownerspersonally,or are not basedon
25 first-handexperiences.
Evenin theseinstances,
Yelp regularlyfails to removesuch
26 reviewsfor Non-Sponsors.
27

FIRSTAMENDEDCoMPLATN'I
1 for decliningto becomea yelp
59. As a resultof theseconsequences
2 Sponsor,Non-Sponsors frequently
seetheirYelp.comratingsignificantly
decrease
soonalierdecliningto becomea Sponsor,
4 60. Thedeclineoftheir Yelp.comrating,andthepostingoffalsenegative
) reviews,harmsNon-Sponsors,
which frequentlysee a drop in the numberof
6 customers
pahonizing
theirbusinesses,
anda decrease
in incomeandprofits.
7 lglp.lgpg4ggredEvents
8 61. Yelp "SponsoredEvents"are parties,gatheringsor other events
9 hostedby businesses
listedontheYelp.comwebsite.
10 62. Businesseshosting SponsoredEvents ate expectedto provide
1 1 attendees
with goodsandservices
for free.
12 63. To inducebusinesses
to hostfree Sponsored
Events,Yelp promises
1 3 positivefeviewsofthe business
in exchange
for theSponsored
Event,
14 64, To inducebusinesses
to hostfreeSponsored
Events,Yelp tfireatens,
l 5 expressly
or implicitly,negativereviewsif the business
doesnot a$eeto hosta
l 6 Sponsored
Event.
t7 Yelp Personnel
Write andPostBusiness
RatinqsandReviews
18 65. Individualsemployed professionally
by Yelp,or otherwise associated
T 9 with the company(for example,thoseworking as conhactors,
consultants,
in
20 temporarypositions,etc.),includingYelp salespeople,are empowered
to post
2 l tatingsard reviewsofbusinesses.
22 66. For example,Yelp's CEO, JeremyStoppelman
had posted865
23 reviewsasof March 1. 2010.
24 67. When enteringa new market,Yelp hires"Ambassadors"
or "Scouts,"
2 5 who are individualspaid by Yelp to find and write reviewsof businesses
in that
location.
27
1 68. In a varietyof contexts,
Yelp personnel
(for examplesalespersonner
2 solicitingbusinesses
to becomeSponsors)
threaten
to writeandpostfalsenegauve
3 reviewsofbusinesses.
4 69. Yelp personnelhavein fact written andpostedfalsenegativereviews
5 ofbusinesses
listedon Yelp.com.
6 70. In somecases,businesses
thatreceivednegativereviewsfrom Yelp
7 personnel
aresubsequently
askedto purchase
advertising
subscriptions.
8 71. In some cases,businesses
that declinedto purchaseadvertising
9 subscriptions
receivenegative
reviewsfromYelppersonnel.
10 TheYelp Elite Squad
72. TheYelp Elite Squadis comprised
of individualsYelp toutsas "the
t 2 mostpassionate
Yelpers,"who Yelp saysit wantsto recognizeandrewatdfor
1 3 beingacxive
onthesite.
t4 73. YelpElite Squadmembers,
or "Elites,"mayor maynot beassociated
1 5 with Yelp. For example,Yelp CEO JeremyStoppelman
is a Yelp Elite Squad
to member,
butmanyElitesarenotemployed
by Yelp.
17 74. Yelp Elite Squadmembersaresupposed
to usetheir real namesin
1 8 theirYelpprofiles,ratherthana handleor nickname,
anda.rerequiredto uploada
t 9 pictureto thefuprofiles.
20 75. A Yelp Elite Squadmemberis identifiedon Yelp with an "Elite"
2 1 badgeadjacent
to the member'snameandphotoin the member'sreviewsandon
22 themember's
profilehomepage.
76. Individuals
mustapplyto become
Elite Squadmembers-
Yelpliststhe
qualificationsfor Elite statusas:
25 (a) Having lots of reviews,and reviewsthat are insightful,
26 andpersonal
engaging (akauseful,funnyandcool!);
27 (b) Havingprofilesthatreallysing!;

FIRSTAMENDEDCoMPLAINT
1 (c) Havinga realphotoofoneselfonone'sprofile;
2 (d) Usingone'srealnameto writereviews;
(e) ptzzazzl,
Personal or whatYelpcalls"Yelptitude,';
and
4 (0 Beingoflegaldrinkingage.
5 77. If individualsthinktheymeetthesecdteria,tley mustsendan email
6 to Yelpexplaining
whytheyshouldbeadmitted
intotheYelpEliteSquad.
7 78. The primarybenefitof becominga Yelp Elite Squadmemberis
8 receiving
frequentinvitations
to freeYelpSponsored
Events.
9 79. Yelp usesthe Yelp Elite Squadas an agentof coercion,promising
positivereviewsfrom Elite Squadmembers,
l 0 businesses or threatening
negative
1 1 reviewsfiom Elite Squadmembers,
depending
uponwhethera business
agrees
to
t 2 hosta fieeSponsored
Eventand/orbecome
a YelpSponsor.
13 80. For example,
a YelpEliteSquadmembersystematically
wentthrough
1 4 businesses
locatedin anarlsdishictin Columbus,
Ohio,givingnegative
reviewsto
1 5 galleries
andotherbusinesses
in thedistrict,whichhe visitedbriefly-but did not
1 6 pahonize-in orderto reviewthebusinesses.
Whenaskedwhy he wasdoingthis,
was'!rou needto contactyourcustomers
1 7 his response andhavethemput up good
t 8 reviews.My goalis to getyouto useYolp,"
t9 81. Yelp compensates
Yelp Elite Squadmembersfor their frequent
20 reviewsthroughthe provisionof ftee parlies,goods,servicesand otheritems.
2 1 Thus,Elite Squadmembers
act asan agentof Yelp.WhenElite Squadmembers
22 reviewYelpSponsors,
Yelpis endorsing
paidadvertisers.
23 82. Individuals
employed
by YelpalsoreviewYelp Sponsors.
24 83. Yelp doesnot disclosethat,throughYelp employees
andthe Yelp
25 EliteSquadu,ritingreviewsof YelpSponsors, paidadvertisers.
Yelpendorses
26
27

FIRSTAT$\DED CoMPLAINT
i Alleeations
of Misconduct
2 84. A February18,2009articlein the EastBay Express,IitledYelpand
3 the Btuinessof Extortion2.0,' describesYelp's unlawfulbusinesspractices.
4 Accordinsto theadicle:
5
6 . Yelp salesrepresentativescontactbusinessownerssaying,"IYL9u_hav9.-g
7 f€w bad lreviewsl at the top. I could do somethingabout thos€.. . , We
8 can move them. Well. for $299a month."
9
l0 . Almost all the time when Yelp calls businesso\ .ners,negativereviews

l1 areat the top ofthe business's


Yelp.comlistingpage.
12
. Mary Seaton,the ownerofa fiirniturestorein SanMateo,took Yelp un
I3
on an offer to removeher neqativereviewsif she adverlisedat a cost of
14
$350 per month for six months.Durins that time. her neqativereviews
t)
were removed and old Dositiveonesshowedup, After her contract was
t6
up. a neqativereview apDeared,which Seatonsaidcontainedlies.
l7
l8
. Greg Quinn, the ovmerof a SanFranciscobar and bistro, said a Yelp
19
salesrepresentativemovednegativereviewsfurther down his paqein an
20
effort to enticehim lo advertise.The salesrep calledMr. Quinnand said,
21
'(Did you noticewhat I did? Well. we can keepdoins that for you.',
22

. An EastBay businessownersaid@
reviewsof his businessif he advertised.
25

27 ' Availableat httpllwww.eastbayexpress.com,/eastbay/yelp-atd-the-business-of-


extortion-20/Content?oid:l l7 6635.

FRSTAMENDED
CoMPLAn.lT
1 . Six peopletold the East Bay Expressthat Yelp salesrepresentatives
2 Dtomisedto move or removenegativereviewsif their businesses
would
3 advertise.
4
5 . Six other people told the East Bay Express that positive reviews
6 disapoeared.or neeativereviewsappeared.after ownersdeclinedto
7 advertise.
8
9 . Yelp pays its employeesto write reviews of businesses;
in one
10 documentedinstance,4_b!!i!gls owner who declined to advertise
1l lublqquentlyreceiyeda nesativereviewfrom a Yelp emplovee.
In other
12 oases,
businesses
that receivenegativereviewsftom paid Yelp employees
aresubsequently
askedto advertise.
t4
l) . Yelp's Chief OperatingOfficer,ceoff Donaker,said advertisers
and
t6 salesrepresentatives
do not havethe ability to moveor removenegative
17 reviews.Donaker'sdenialsarechallenged
both by localbusiness
o*'ners,
18 a.ndby a former Yelp €mplovee.who said that several salesrep$ told him
19 thev Dromisedto mover€viewsto get businesses
to advertise.
20
2l 85. As of Febn-rary8, 2010, there are 140 commentson the East Bay
22 Expresswebsitefollowing the Yelp article,manyfrom businessownersdescribing
2 3 experiences
similarto thosediscussed
in the article.
24 86. A follow-up East Bay Expressarticle providesllrlher evidenceof
2 5 Yelp's unla*ful sales practices.The March 18, 2009 afiicle, Yelp Extortion
zo Allegations Stack Up: More businessonners comeforward with tales of tmethical

27

FIRSTAMENDED
coMPLAnir
1 behavior by the popular San Francisco-bqsed
web site' statesthat since the
2 publication
ofthe first article:
fM]any businessovmers ftom around the counfy have come
4 forward-via emailsor commentson theExpress'website-alleging
5 similartalesof extortionist
tacticsby Yelp salesreps., . . Business
6 o\..nerscontendthat they just wart [ar] opportunityto respondto
7 negative,false, or damaginginformationabout their businesses.
8 Instead,
the onlyway for themto salvage
theirbusinesses'
reputation
9 is by payingYelp-regaf,dless
ofwhetherthereviewsarehueor false.
l0 . . . [Sleverallinterviewees]
saidthatthe repswouldoffet to move
ll negativereviewsif they advertised; and in somecasespositive
12 reviewsdisappeared
whentheyrefused,
or negativeonesappeared.
In
13 onecase,a nightclubownersaidYelpofferedpositivereviewsof his
14 business
in exchange
for freedrinks.
15 87. The afticle tells the storiesof six Californiabusinessowners'
l 6 exoeriences
with Yeln:
l7
l8 . After Barry' I-I/de,orvnerof M&M Auto Werkesin Campbell,receiveda
19 negativerating from a customer'sboyfriend,violatingYelp's Termsof
20 Service(prohibitingthird partiesfiom postingreviews),he contacted
Yelp
2l salesrepresentative
Jacqueline Fitzhughto complain.Shetold him, .6W9
22 can't control that. but if vou advertisevou can control the order that
thevrre in." After declininq. Mr. Hvde noticed some ofhis five-star posts
24 were disappearine. Yelp told him the website has a spam filter, like
z)
26 'Available at httpl lwww.eastbayexpres
s.com./eastbay/yelp-extortion-allegations-
2',7 stack-up/Content?o id:l17 6984.
t The
Article inconectlyidentifieshim as"Bob" Hyde.
16
FIRSTA},GNDEDCOMPLAINT
1 Google.Hyde trackedhis reviews,printing them daily to monitor which
2 oneswoulddisappear.
Somefive-starreviewsstayedup for as shorlas 3l
3 daysandaslongas 131days.Yelp told Hyde that if he advertised.
some
4 ofthosefive-starreviewswouldcomeback.
5
6 . CalvinGeeof HaightStreetDentalin SanFrancisco
sawhis mting&op
7 from five-stars
to 3.5-stars
followinghis decliningto buy advertising.
!9!p
8 rens told Gee that if he advertised.thev would let him choosehis
9 favorite reviewand would movethe neeativereviewsto the bottomof
l0 the pase. Gee noticedthat one of his competito$,CitiDent,had two
11 separate
listingson Yelp.com.
Thebusiness
hadmorepositivereviewsanda
12 higherstarratingon the pagethat wasmarkeda Yelp sponsor,
andmore
13 ncgalivereviewsanda lowerstaxratingonthehaf,der
to find non-sponsored
14 page.
l5
l6 . La.rryTrujillo owns the UptownNightclubin Oakland.Shorllyafter
l7 openingthe club,a Yelp salesrepbegancallinghim "almostdaily" about
18 advertising. The sales rep would soy 'tI noticc vou have a lot of positive

19 reviews.We could make sure that those reviews stav positive.',Sarah


20 Lippman,a SalesManagerat Yelp, separatelyaskedMr. Truiillo for free
2l use of his club with Yelp staff and alcohol expensesnaid bv the club in
22 exchaneefor positivereviewson the club's Yelp.comlistins pase.
23
24 . DebbieLeonardo,directorof membershipat the Ruby Hill Golf Club in

25 Pleasanton,receiveda phonecall ftom a Yelp salesrepresentativewho


26 told her that the businesscould eet rid of its worst review if it Durchased
27 advertisine.

I7
FIRSTAMENDEDCoMPLA0.IT
1 . Bob Kurtz, owner of CollectorsReal 3 in Oakland,was contactedby a
2 Yelp salesperson after receiving a negativereview. In an email, !g!p-.!q!!
3 him that. as a paid advertiser.the nesatiyereview could be dealt with.
4
5 . NicholasPaul,an instructorat a Chicagoart studio,declinedto purchase

6 advertisingand shortly thereafterthree positive reviews disappeared


ftom
7 ard two negativeoneswere addedto the studio'sYelp.comlistingpage.A
E Yelp salesrep told Mr. Paul he could control that.
9
l0 88. An August13,2008articlein The Register,a newswebsite,titled
l 1 Yelp"pay toplay" pitch makesshopsscream help: (Jsergenerateddiscontenl
for
1 2 notesthat:
l3 At leastsomeof Yelp'ssalesstaffhopeto makemoneyby offeringto
t4 hidewhatyou andI haveto say.Overthelastyear,five SanFfancisco
15 Bay Area businesshavetold,TheRegisterthat th€ companyhas
lo € bottom" of the
l7 thev paid to advertise on the site. One restauant oMler was
l8 contacted"five or six" times, and each time, the yelp salesrep
19 insistedthat if he forked over $6,000a year for "sponsoredlink,,
20 status,the site would suppressuserpoststhat put his restauantin a
2l less-than-positive
light. "They told me I had 60 reviewson my [yelp]
22 page,"saidthe owner. . . . "They told me 'No one is goingto readall
23 60. They'reonly goingto readthe first few.',,
89. A March 9, 2009ChicagoTribunearlicle,titled,Questionsarise over
25 Yelp's ads, reyiews; Businessessqy site reqrrqnges opinions
for price; CEO
26 funies.5 rcoorted'.
27
" Availableat httpllvw,rw.theregister.co.uk/2008/08/13lyelp_salesjitch/print.hf
18
F]RSTA]\'MNDEDCOMPLAI}.]T
I . Ina Pinkney of Ina's restaurantin the West Loop said that last
2 summerLY9ID salespersonoffered 6to move up mv good reviews
3 if I sponsor€done of their €vents.They called it rearransins mv
4 reviews."
5
6 o JasonLuros,an attomeyat Hudson& Lurosin Nap4 California,
7 stated"one of our reviewsmysteriously
disappeared,
so I contacted
8 Yelp andwas giventhe usualcannedresponseabouthow no humans
9 conholthe reviews.But when I sa!{!.gqg!!994q!!993{y94!!qi4g_if
10 thevrestoredthe review.it mvsteriouslv
reanneared."
ll
12 90. An April 3, 2009articlein the SantaMonicaDaily Presstitled lelp
SalesI'acticsCauseC'oncern
AmongBusiresses,6
reported:
After decliningto advefiise, ownerchecked
the [LosAngelesarea]business
15 the Yelp page againand noticedthat at least 10 positivereviewshad
16 while a few negativeoneshadbeenposted., . . Theyestimate
disappeared
17 that at least20 positivereviewshadbeendeletedftom the site sincethe
18 r.:onversation
withYelpabou[thraewaeksago.
19 A Summarvof YelD'sMisconduct
20 91. Yelp salespeoplerepresent thatYelp hasthepowerto
to businesses
2 1 manipulate listingpages,andthatYelpwill yieldthatpowerin
Yelp.combusiness
22 favorof the business
if it becomes andagainstthe business
a Yelp Sponsor, if it
23 declinesto becomea Yelp Sponsor.
24
25
26 5No longeravailableonline.
27 oArailable at hltpLlwww.smdp.com,/Articles-c-2009-04-02-
52021.113116_Yelp_sales_tactics_cause_for_concem_among_businesses.hfin
19
FIRSTAMENDEDCoMPLAINT
1 92. The mererepresentation
of the abilityto manipulate
pagecontentis
2 sufficient to instill in businesses
the fear that, through such manipulation,the
3 businesswill suffer if it electsnot to becomea Yelp Sponsor.Businesses
frequentlybecomeSponsors,not basedon a cost-benefitanalysisof the
5 advertising, but simply because they fear the consequencesof declining a
6 Sponsorship.
7 93. Yelp in factmanipulates
Yelp.combusiness
listingpagesin favorof
8 Yelp Sponsorsand detrimentallyto Yelp Non-Sponsors,
including by (a)
9 telocatingor removingnegativereviewsof Sponsors;
(b) postingposittverevrews
1 0 of Sponsors
andurgingothers,suchasYelpElite Squadmembers.
to dothesame;
1 l (c) allowingSponsors
to choosethe order in which reviewsappearon their
1 2 Yelp.comlisting pages;(d) removingpositivereviewsof Non-Sponsors;(e)
I 3 postingnegativereviewsof Non-Sponsors
andurgingothers,suchas Yelp Elite
to do the same;and(f) enforcingYelp's Termsof Servicefor
1 4 Squadmembers,
l) Sponsors,
butrefusingto enforceYelp'sTermsof Seryicefor Non-Sponsors.
l6 PLAINTIFF.SPECIFICFACTUAL ALLEGATIONS
t7 THE NON-SPONSOR
PLAINTIFFS
18 Plaiutiff Ca!p349!!9gq
t9 94. On September
12,2009,Dr.Peffault,a veterinarian
andtheownerof
20 CatsandDogs,becameawareof a negativereviewpostedby "ChrisR." on the
z l CatsandDogsYelp.comlistingpage.
22 95. Concerned
aboutthe review'sdefamatory possiblefalsity,
language,
23 andtheadverse
impactit couldhaveon hisbusiness,
Dr. Perraultcross-referenced
24 thefactualinformationallegedin thereviewwith his clienthistory.
25 96. Upon finding that the review of Chris R. referenceda visit that
26 occurred
overl8 monthspriorto itsposting(6 monthsoutsideof Yelp'sl2-month
27 policy),JavierVargas,theHospitalManagerat CatsandDogs,calledYelp,on or

FIRSTAMENDEDCOM?LAINT
I around September15, 2009, to requestthat the review be removedftom the
2 Yelp.comwebsitefor violating Yelp's review guidelines.The review was
3 subsequently
removed
ftomtheCatsandDogsYelp.comlistingpage.
4 97. A seconddefamatory
review,from "Kay K.," appeared
on the Cats
5 and Dogs Yelp.comlistingpagewithin five daysof the "Chris R " rcview's
6 removal.Thereviewread:
7 Theonly reasonI am evengfuingone star is becauseit wouldn't
8 qllow me to continuewithout it . . . otherwise,I uould havegiven
9 themno slars. Dr. Peftault is the rudestyet I'ye erel beento
10 probablyoneof therudestpeopleI've had thedispleasureofmeeting.
1l I dgreewith thepreyiousreriewsdboutmakingyoufeel like an unfit
12 mom.My pup hadbeensickandI hada theoryon whattheproblem
t3 mayhavebeenandhe wouldn'te|enenterlainthe idea,but instead,
l4 mademefeel bad becqusemy dog got sick And, my poor dog was
l) terrified of him! He made me feel like I was 2 inches tall and
16 repeatedulooked down his noseat me. Oh, and OVERPRICED!
17 OMG! Whodoeshethinkheis???I did notfeelwelcomed
by himnor
18 lds staff. I paid youfor a service!No needto tt eat ne so bad!
19 98. Soonafterthe appeaxance
ofthesenegativereviews,Dr. Peraultand
20 Mr. Vargasbegan receivingfrequent,high-pressure
calls ftom Yelp sales
2 l representatives,
whopromised
to manipulate
CatsandDogs'Yelp.comlistingpage
22 in exchange
for CatsandDogspurchasing
anadvertising
subscription.
23 99. For example,
on or aboutJanuary5, 2010,CatsandDogsreceiveda
24 Yelp salescall from'Kevin." KevinsaidthatCatsandDogscouldadvertise
with
25 Yelp for a minimumpaymentof $300per month,with a minimum12-month
26 commitnent.Kevin statedthat if CatsandDogspurchaseda one-yearadvertising
27 subscriDtion
ftom Yelo:
I Yelp wouldhidenegativereviewson the CatsandDogsyelp.com
2 listingpage,or placethemloweron the listingpageso internetusers
3 "won't see"them;
4 b. Yelp would ensurenegativereviewswill not appearin Googleand
5 othersearchengineresults;
6 Yelp wouldallowCatsandDogsto decidethe orderthatits reviews
7 appearin on its Yelp.comlistingpage;and
8 d. CatsandDogscouldchooseits 'lagline,"i.e.,thefirst few linesof a
9 singlereviewshownon everysearchresultpagein whichCatsand
l0 Dogsappears (for instarce,"Veterinarian
in LongBeach',).
11 100. Dr. Peffaultdeclined
theoffer,sayingthathewantedto trackrefetals
1 2 from Yelp for threemonthswithoutads,but mightthereafter
be willing to test
1 3 Yolp'sadvertising
potential.
14 101. Within a week of decliningKevin's advertising
offer,the negative
t 5 reviewfromChrisR. reappeared
ontheCatsandDogsYelp.comlistingpage.
l6 102. Soonafter,"Kay K." posteda secondnegativereview.This review
1 7 wasaddedonJanuary
6,2010,o\e dayafterKevin'ssalescall:
18 I't'e alreadyleft onereyiewabouthow bad a yet Dr. peftdult is, but I
t9 wanled to add something.I'ye beenreading otherpeople,sreyiews
20 and I must haye gone to a diferent Cats and Dogs Animal Hospital
2l with a yet namedDr. Perruult. Oh wait, no . . . he,s the only one.
22 Maybe it's a Dr. Jeclgtl/ Mr. Hyde thing?! I don't lotow. But the gur's
23 an @S$. No other wqy around it. He's a jerk, a D-Bag, Antl so
24 arrogant. I ran in to him in a neighborhoodstote right after he saw
25 my poor sick dog at his clinic and he looked right qt me, recognized
26 me, rolled his qtes and lookedaway!!!! Seriously,someoneneedsto
27 Iolock this gtry down to the size he really is. He needs to drop his

22
FRST AMENDEDCoMPLAT\T
1 Napolean complex and be a professional. After my hotible
2 experiencewith him,I took my sick dog to BixbyAnimal Clinic andI
3 hayeneyerhad a moreple(lsantyet experiencelGo thereinstead!M,
4 dog loved everyonethere!Sorry to runt, but I just wantedto get the
5 word out thele. Don't spendthe moneyon this oyerpricederrogen,
6 yet.It's notworthit!
7 103. On or aboutJanuary12,2010,Mr. Vargascontacted
yelp to protest
8 the reappearance
of the "ChrisR.', reviewandthehighlynegative,
inflammatory
9 'Kay K." reviews.
10 104. On January13,2010,Mr. Vargasreceivedvia emailthe following
1 l response
ftom Yelp:
12 We wantedto let you know that we,vetaken a close look at the
13 reviewsby CbrisR andKay K, andafter carelll evaluation,we have
t4 decidedto leave both intact. Becausewe don't have frrsthand
15 knowledge
of a reviewer's
identityor personal
experience,
we arenot
lo in a positionto veri& your claimsthatthesereviewersaretfie same
17 person,or that they are connectedto the recentvandalismat your
18 hospital.If a review appearsto reflectthe personalopinionand
t9 experiences
of the reviewerwhile adheringto our reviewguidelines
20 [ink], it is ourpolicyto allowthereviewerto standbehindhisor her
2l revlew.
22 andDogserjoyeda 4-starrating(out ofa
!. Sixteenout of 26 reviews(over 60%)
24 g. Despitethis, as of January18,2010,a
25 ,gBeach"displayedthe following tagline
26
27

FIRSTANGNDEDCo\GLANT
1 "Dr, Peffault is the mostinept/rudeteterinariahI hqyeeyermet.He
2 had my rescuedog eoweringand barkingin the corner of the exam
3 roomwithin secondsof meetinghim. Ee beratedmefor 20 . . . "
4 106. CompareCatsand Dogs,taglineto the tagline(as of January1g,
5 2010)of Bixby AnimalClinic,a Long Beachveterinarybusiness
thatis a yelp
6 Sponsor(andthe samecompanythe mysteriousKay K. referredusersto in her
7 second
CatsandDogsreview):
E "ThisplaceIS awesome.
I broughtmylittle man(Bruin)to Dr. A. as a
9 puppyfor thepuppypackage.Theyhaw greathoursandwereableto
l0 acommodate meAFTERworksoI neverhadto takgextratime, . .
l1 as a resultof yelp,s actions,including
107. CatsandDogswasdamaged
1 2 throughlostpatronage
andprospective
business.
t3 108. Cats and Dogs' expefience with yelp was not unique,but rather
1 4 typicalof Yelp'sadvertisement
salestactics.
lf PlaintiffAstro
l6 109. Approximately
a weekafterresponding
to a negativereviewof Astro
1 7 on theYelp.comwebsite,Bob Gutgsell,
who ownsandoperates
Asto, received
a
t 8 callftom a Yelpsalasrepresentative a yelp Sponsor.
askingAstroto become
19 ll0. The salespersonstatedthat,if Astro becamea Sponsor
at a costof
2 0 $400per month,Yelp couldandwouldremovenegativereviewsof thebusiness
2 1 from its Yelp.comlistingpage.Paraphrased,
the distinctimpression
Mr. Gutgsell
22 received fromtheYelp salespersonwas,\ve takecareofpeoplewhotakecareof
23 us."
24 111. Mr. Gutgsellthoughtthis waswrongarrdsaidso to the yelp sales
2 5 representative
in decliningto purchase
an advertising
subscription
on behalfof
26 Astro.
27

FIRSTAMENDEDCoMPLAINT
1 112. Withintwo daysof decliningto becomea Sponsor,
Mr. Gutgsellsaw
2 severalpositivereviewsdisappeat
from Asto's yelp.comlistingpage,leaving
3 only a singlenegativereview.
4 113. Mr. Gutgsellcontactedyelp to ask why positivereviewsof the
5 business
weredisappearing.
TheYelpsalesrepresentative
hespoketo advisedhim
6 thatYelpcould"control"that,andif Asho became
a Sponsor,
thepositivereviews
7 couldberestored.
E I 14. YelpfurthertoldMr. GutgsellthatYelpcouldconfol thereviewsand
9 hitsonAsho'sYelp.comlistingpageif hebecame
a Sponsor,
helpinghisbusiness
1 0 Iistingto "shine"abovehiscompetitors,
listings.
l1 as a rcsultof yelp,s actions,includingthrough
ll5. Astio was damaged
1 2 lostpatfonage
andprospective
business.
t3 with yelp was not unique,but rathertypicalof
116. Astro'sexperience
1 4 Yelp'sadvertisement
salestactics.
t5 PlaintiffAdult Socials
l6 I 17. In November,
2009,Adult Socialshadseveralpositivereviewson its
1 7 Yelp.comlistingpage.
l8 118. In late November,2009,a Yelp salesrepresentative
contactedJack
1 9 Irona, an Adult Socialsemployee,and proposedthat Adult Socialspurchasean
20 advertisingsubscription.
21 119. After researching
Yelp and consideringthe offer, Mr. Irona placeda
22 call back to the Yelp salesrepresentativewho had conlactedhim, and declinedthe
offer to puchase an advedisingsubscription.
24 120. The following day, all of Adult Socials, reviews-all positive-
25 disappeared
ftom Adult Socials'Yelp.comlistingpage.
121. Adult Socialswas damagedas a result of yelp,s actions,including
27 throughlostpahonageandprospectivebusiness.

FIRSTAMEM)ED CoMPLAI.{T
I with yelp wasnotunique,butrathertypical
122. Adult Socials'experience
2 of Yelp'sadvertisement
salestactics,
3 PlaintiffLe PetiteRetreat
4 123. Le Petite Retreatbeganreceivingsales calls ftom yelp sales
5 representatives June2009,usuallyfrom yelp employccnamed
in approximately
6 MichelleMak.
7 Ms.Mak toldLe petiteRetreat
124. Thesesalescallswereaggressive. that,
8 if the companypurchased shewould,,help',with Le petiteReteat,s
advertising,
9 negativereviewsandwouldensurethatpositivereviewsremainedon Let petite
l 0 Retreat's
Yelp.comlistingpage.
l1 125. Le PetiteRetreatdeclinedYelp,s offersto puchaseadvertising
on
1 2 several
occasions. Le petiteRetreatsawpositive
Eachtime,shortlyafterdeclining,
t 3 reviewsremovedfromits Yelp.comlistingpage,whilenegativereviewsremained.
1 4 Approximately
ten positivereviewshavebeenremovedfrom Le petiteReheat's
.l) Yelp.comlistingpagesincethecompany
beganreceivingsalescallsfromyelp.
l6 126. In September,
2009,Le PetiteRetreatcontactedyelp abouta false
1 7 negative
reviewthathadbeenposted,whichviolatedyelp's Termsof Service.
In
1 8 fact,anidenticalrcviewhadbeenpostedon Cityseaf,ch.com
(a reviewwebsitelike
l 9 Yelp.com)five yearsearlier,whichpromptedlegalactionby Le petiteRetreat.
20 DespiteviolatingYelp'sTermsof Service,
Yelprefusedto removetherevrew.
2l asa resultof yelp's actions,
127. Le PetiteReteatwasdamaged including
22 though lostpatronageandprospectivebusiness.
128. Le PetiteRetreat'sexperiencewith Yelp was not unique,but rather
24 typicalof Yelp'sadvertisement
salestactics.
25 Plaintiff Mermaids Cruise
26 129. In AptiI 2009,threenegativereviews of Mermaids Cruisewere posted
27 by Yelp Elite Squadmemberson MermaidsCruise'sYelp.comlistingpage.

I'IRST AMf NDEDCOT4,LAINT


1 130. MermaidsCruiseruns cruiseeventsin the San FranciscoBay. The
2 compary keepsrecordsof all personswho contactthe company,regardlessof
3 whetherthey ultimately book a cruise.
4 131. At leasttwo of the April 2009 regativereviewsby yelp Elite Squad
5 memberswere written by individualswho had never contactedor patronized
6 MermaidsCruise.WhenJohnLewis,the ownerof MermaidsCruise,contacted
7 Yelp to askthat the reviewsbe removedbecause
theyviolatedyelp's Termsof
8 Service(in thattheywerenotbasedon first-handexperiences
with thecompany),
9 Yelprefused
to removethereviews,
10 132. At the sametime, positivereviewsof MermaidsCruiseregularly
1 l disappeared
within48-72hoursofposting.Evenwherepositivereviewsremained,
12 though,thenegativeYelpEliteSquadreviewsalwaysremained
prominent,
located
IJ atthetop ofthe MernaidsCruiseYelp.comlistingpage.
l4 133. Afterthesenegative
reviewsappeared,
Mr. Lewisreceived
a callfrom
1 5 a Yelp salesrepresentative
who told him that, if MermaidsCruisebecamea
l 6 Sponsor,Yelp could adjustthe reviewsso that the negativeyelp Elite Squad
1 7 reviewswerenotsoprominent.
18 asa resultof yelp,sactions,
134. MermaidsCruisewasdamaged including
t 9 throughlostpahonageandprospectivebusiness.
20 135. MermaidsCruise'sexperiencewith Yelp was not unique,but rather
2 1 typicalof Yelp'sadvertisement
salestactics.
22 plaintiff Wae Mv Tail
136. After receivingseveralnegativereviewsand seeingpositivereviews
24 disappear,a Yelp sales person called Wag My Tail seekingthe company,s
25 agreement
to becomea Yelp Sponsor.
26 137. Wag My Tail has a brick-and-mortardog salon, and also runs a
27 mobile grooming service.Although it is the same companyperformingboth

FIRSTAMENDEDC0MPLAINT
I functions,Yelp has inexplicablydividedthe businessinto two separatelistings,
2 onefor thesalonandonefor themobileservice.
3 138. The Yelp salesrepresentative who contactedWagMy Tail told the
4 companythat if it advertised
at a rateof $135per monthfor the WagMy Tail
5 salon,and$270permonthfor themobileseruice, .,assistant,'
the representative,s
6 couldhelpto maragethe issuesWagMy Tail wascomplaining about,andwould
,l
helpthecompanybetteritsrating.WagMy Tail hasdeclined
to becomea Sponsor.
E 139. Potentialcustomers
havetold WagMy Tail thattheyhavechosen
not
9 to patronize
thebusiness
based
on Yelpreviews.
t0 as a resultof yelp,s actions,including
140. Wag My Tail wasdamaged
1 1 throughlostpatronage
andprospeotive
business.
12 141. Wag My Tail's experience with yelp was not unique,but rather
1 3 typicalof Yelp'sadvertisement
salesTacncs.
t4 PlaintiffScion
l5 142. Scionopenedin Washington,
D.C., in June2009.In August,2009,
1 6 Julie Liu, Scion'sovmerand operator,signedup for a fiee yelp BusinessOwner
l 7 Account. Two weeks later, Ms. Liu began receiving calls from yelp sales
1 8 representatives,
offeringScionodvertisingpackages.
The callswerefiorn rlifferent
1 9 Yelp salesrepresentatives
andoccunedapproximatelybi-weekly,
20 143. A Yelp salesrepresentative
lold Ms. Liu that negativereviewscould
2 1 be removedwith the paymentof fees. Concernedthat if she ageed, negative
22 reviewscould be continuouslyaddedto Scion'syelp.com Iistingpagein orderto
solicit more fees-a processwhich might be never-endingand completelyout of
her control-Ms. Liu questionedthe salesrepresentativeas to how she could be
surethat Yelp would not postnegativereviewsitself in orderto requestmore fees
ftom Scion.The salesrepresentative
hungup on Ms. Liu. WhenMs. Liu attempted
to call the salesrepresentativeback, therewas no answet.

28
FRST AMENDEDCoMPLAINT
1 144. After two months of receivingsales calls and discussingthe
2 possibilityof becominga Sponsor,
Ms. Liu unequivocally
declinedto do so.The
3 following day, approximatelyfive s-stax reviews disappearedfrom Scion's
4 Yelp.comlistingpage,andthee negative
reviewswerepostedto thepage.
5 145. Two of the new negativereviewswere demonstrablv
false.The
6 reviewscommented
on a menuthatwasstill postedon Scion,swebsite,but that
7 Scionwasno longeractuallyusingat the time the experiences
described
in the
8 reviewssupposedly
tookplace.
9 as a resultof yelp,s actions,includingthrough
146. Scionwas damaged
1 0 lostpatronage
andprospective
business.
1l 147. Scion'sexperience
with Yelp was not unique,but rathertypicalof
1 2 Yelp'sadvertisement
salestactics.
THE SPONSOR
PLAINTIF'FS
t4 PlaintiffBleedinsHeart Bakerv
15 148. BleedingHeartBakeryhastwo locationsin Chicago.Eachlocation
l 6 hasa sepaxate
Yelp.comlistingpage.
17 149. Beginningin 2007,Yelp begancallingMichelleGarcia,Bleeding
l 8 HeartBakery'sownerandoperator,
includingon herpenonalcellphone,tryingto
t 9 get Ms. Garciato purchasea Yelp adverlisingsubscription
on behalfof the
20 BleedingHeartBakery.
2l 150. On oneor moreoccasions on thesephonecalls,Ms. Garciapointed
22 out thatsomereviewsof theBleedingHeartBakeryweredemonshably ,,bogus,,'
23 for example,purpoftingto describean experience
that occunedon a day tlnt
24 BleedingHeartBakerywasclosed.
25 151. A YelpsalespersoncallingMs. Garciapromised
that,if sheagreed
to
26 purchasean advertisingsubscription,
Yelp wouldpushbadreviewsto the very end
27 of Bleeding Heart Bakery's Yelp.com listing pages,and that the sales

29
FtRsr AIIGNDED Cotvf LAINT
would personallyremove the ,.bogus,,reviews Ms. Garcia
I representative
2 complained
of.
3 Ms. Garciathat,asa yelp Sponsor,
152. Yelp furtherpromised shewould
4 be allowedto chooseher favorite19greviews,which would alwaysappearat the
5 topofBleedingHeartBakery'sYelp.comlistingpages.
6 Ms. Garciathat,asa yelp Sponsor,
153. Yelp fudherpromised shecould
7 choosewhich picturesuploadedby reviewerswould appearon BleedingHeart
8 Bakery'sYelp.comlistingpages,
andwhichwouldberemoved.
9 154. Basedon thesepromises, in November,2008Ms. Garciaagreedto
l 0 purohase
an advertising from Yelp.Althoughyelp hadurgedherto
subscription
1 t purohase for just one of the BleedingHeartBakery,syelp.com
a sponsorship
t 2 listingpagesfor $500per month,Ms. Garciaeventuallynegotiateda dealthat
l 3 wouldcoverbothol theBleedingHeartBakery,syep.comlistingpagesfor g600
I 4 per month.The telm of the contractwas one year.Ms. Garciapaid
the first
l 5 month'schaxge
by creditcard,andYelpautomatically
charged
subsequent
months
to to hercreditcardon a monthlybasis.
17 155. A1 the time BleedingHeartBakery becamea yelp Sponsor,the
l 8 company
enjoyeda 4-starYelprating.
19 156. Duringthe samemonththatBleedingHeartBakerybecamea yelp
20 Sponsor, werepostedby yelp Elite Squacl
six negativereviewsof the business
2 1 members.
Someof the reviewscontained
personal
attacks.
Duringthesametime,
22 several4-staireviewsdisappeared
fromBleedingHeartBakery,syelp.comlisting
23 page.
157. As a result of the new negativereviews and disappearingpositive
25 reviews,BleedingHearlBakery'sratingdroppedto 3.5-stars.
26 158. As a result of these negativereviews, Bleeding Hearl Bakery,s
27 businesssuffered.For example,during a week following the posting of these

FIRSTAMENDEDCOMPLAINT
1 negativereviewsby Yelp Elite Squadmembers,
BleedingHeartBakerywentftom
2 typicalsalesof 300 cupcakes
per week,to just 24 cupcakes,
andwasforcedto
3 throwoutthe remainderofits inventory.
4 159. When Ms. Garcia called Yelp to complainabout the reviews,
5 includingthe personalattacks,Yelp told her that if she becamea ,,premier,'
6 advertiser-at a higher cost-yelp would talk to the yelp Elite Squadand ,.ask
7 themto givethebusiness atothershot.',
8 160. Yelp furthertold Ms. Garciasaid that if BleedingHeartBakery
9 increasedthe amountof its advertisingsubscriptionto becomea ,,premier',
l 0 advertiser,
YelpwouldbringBleedingHeartBakery'sstarratingbaokup.
11 with yelp wasnot unique,but
161. BleedingHearlBakery'sexperience
1 2 rathertypicalof Yelp'sadvefiisement
salestaotics.
t3 PlaintiffSotaOutlet
14 162. Maty Seaton,SofaOutlet,so\aner,receiveda call from a yelp sales
l 5 representative,
who told herthat,if SofaOutletagreedto purchase
an aclveftising
1 6 subscription,
SofaOutlet'spositivereviewswouldbemademoreprominent while
1 7 SofaOutlet'snegativereviewswould be madelessprominentand,eventually,
l 8 removed
altogether,
19 163. On January25, 2008,Mary Seatonenteredinto a 9350permonrn
20 advertising
subscription
with YelponbehalfofSofaOutlet.
21 164. SofaOutletca.ncelled
its advertising
subscription
on JunelZ, 200g,
22 whichwasofficiallyterminated
June20,2008.
23 165. Within approximatelytwo weeksof SofaOutlet'steminationdate,
manypositivereviewstlat Sofa Outlethad received,especiallythose\aritten
25 duringthe subscription ftom the SofaOutletListingpage,
period,disappeared
26 whilenegative
reviewsthathadbeenpreviously
removed
reappeared.
27

3I
FIRsr AMENDED
Co\pLAn{T
I with yelp wasnot unique,but ratherfpical
166. SofaOutlet'sexperience
2 of Yelp'sadvertisement
salestactics.
3 PlaintiffCelibrd
4 167. Celibrf is curently a Yelp Sponsor,havingpurchasedan adverlising
5 subscription
in January,
2010at a costof $300permonth.
6 168. Celibrdbecamea Yelp Sponsor a yelp salesrepresentative
because
7 promisedKevin DiCerbo,Celibrd'sowner,that yelp would allow Celibtdto
8 choose
theorderofreviewson itsYelp.comlistingpagein exchange
for becoming
9 a Sponsor.
l0 169. Yelp hasin fact movedreviewson Celibrd,sYelp.comlistingpage
l 1 according
to Celibrd'swishes.
12 170. Celibrd'sexperience
with Yelp wasnot unique,but rathertypicalof
1 3 Yelp'sadvertisement
salestactios.
t4 CLASSREPRESENTATION
ALLDGATIONS
15 171. Plaintiffsbringthisactionon behalfof themselves
andthefollowine
1 6 Classes:
l7 TheSponsorClass
l8 All personsandentities(excluding officers,directors,
andemployees
of Yelp) in the United Stateswho, from Octoberl, 2004 to tne
19 prcsent,as a result of Yelp offering or threateningto manipulatea
Yelp.comlisting pagein exchange for purchasingor decliningto
20
purchaseadvertisingseruices, purchased advertisingservicesftom
2l Yelp.
22 TheNon-Sponsor Class
All persons andentities(excluding officers,directors,
andemployees
of Yelp) in the UnitedStatesto whom,from October1, 2004to the
24 presen!Yelp offeredor threatened to manipulate a Yelp.comlisting
25 pagein exchange for purchasingor decliningto purchaseadvertising,
andwhodeclined to purchase
advertising.
26
27 172. Like Plaintiffs,all membersofthe Non-Sponsorand SponsorClasses
havea Yelp.comlistingpage.

FIRSTANa}.DEDCoMPLAn.IT
I 173. Like Plaintiffs,all members
ofthe Non-sponsor
andSponsor
Classes
2 were contactedby Yelp sales representatives
and asked to buy advertising
3 subscriptions
ft omYelp.
4 174. Like Plaintiffs,all members
of theNon-Sponsor
andSponsor
Classes
5 were promisedthat, if they purchasedadvertisingfrom yelp, negativerevrews
6 wouldbe removedor relocaled fromtheirYelp.comlistingpages,or trasepages
7 would otherwisebe favorablymanipulated,includingthroughtheir own input or
8 conhol.
9 175. Like Plaintiffs,all members
of theNon-Sponsor
andSponsor
Classes
1 0 werethreatened,
implicitlyor expressly,
that if they did not purchase
adverlising
1 1 from Yelp, their Yelp,comlisting pageswould be detrimentally
manipulated,
1 2 includingfor example,by removingpositivereviewsandpostingnew,negative
l 3 rgviews.
14 176. Like Non-Sponsor
PlaintiffsCatsandDogs,Astro,Adult Sooials,
Le
ll PetiteRetreat,MermaidsCruise,Wag My Tail, and Scion,all membersof the
1 6 Non-SponsorClassdeclined
to become
a YelpSponsor.
17 177. Like Non-Sponsor
PlainliffsCatsandDogs,Astro,Adult Socials,
Le
l 8 PetiteRetreat,MermaidsCruise,Wag My Tail, and Scion, all membersof the
1 9 Non-Sponsor
ClasssawtheirYelp.comlistingpagesdehimentally
modifiedafter
20 declining
to becomea YelpSponsor.
2l 178. Like Non-Sponsor
PlaintiffsCatsandDogs,Astro,Adult Socials,
Le
22 PetiteReheat,MermaidsCn-rise,
Wag My Tail, and Scion,all membersof the
Non-Sponsor
Classweredamaged
asa resultof Yelp'sactions.
24 179. Like SponsorPlaintiffsBleedingHeart Bakery,Sofa Outlet and
z) Celibr6,all membe[sof the SponsorClasspurchased
advertising
subscriptions
26 fromYelpbasedon Yelp'spromises
andthreats,
express
or implicit.
27

FTRSTAMENDEDCONPLA]].IT
1 180. Like SponsorPlaintiffsBleedingHeart Bakery,Sofa Outlet and
2 Celibrd,all membersof the Sponsor
Classwouldnot havepurchased
adverlising
3 subscriptions
with Yelpabsent
Yelp,spromises
andtlreats,express
or implicit.
4 181. Plaintiffs'claimson behalfoftheClassaremaintainable
underRules
5 23(b)(2)and23(b)(3)of theFederal
Rulesof Civil Procedure.
6 of law andfact commonto plaintiffsandthe Classes
182. The questions
7 include:
8 a. WhetherYelp extortedthe SponsorPlaintiffs and membersof
theSponsor
Class;
9
b. WhetherYelp attempted
to extortPlaintiffsandmembersofthe
10 Closses;
l1 c. Whether Yelp intentionally interferedwith the prospective
12 economicadvantage ofPlaintiffsandmembers ofthe Classes;
d. WhetherYelp violatedthe "unlav*ful',prong of Califomia's
UnfairCompetitionLaw,includingby:
t4
i. CommittingExtortionin violationof Cal. pen. Code
15 ggs
18-
1e;
16 ii. Committing Attempted Extortionin violationofCal.pen.
Code9524;
t7
iii. Intentionally
interferingwith theNon-sponsor plaintiffs'
18 andNon-Sponsor ClassMembers, ProspectiveEconomic
19 Advantages;and
20 iv. Violating16 C.F.R. paxt255by failingto disclosethat
Yelpprovidesendorsed reviewsofpaid advertisers;
21
e. WhetherYelpviolatedthe"unfair"prongofCalifornia'sUnfair
22 Competition
Law;
f. WhetherYelp violatedthe "ftaudulent"prongof California's
Unfair CompetitionLaw;
24
g. WhetherPlaintiffsandthe Classeswereinjuredby the conduct
25 complainedofherein;
26 h. Whethertheconductdescribed hereinis ongoing;
27 i. WhetherPlaintiffs and membersof the Classesare entitledto
damaees:

FIRSTAMENDEDCoMPLAINT
1 J WhetherPlaintiffs and membersof the Classesare entitledto
2 injunctiverelief; and
WhetherPlaintiffs and membersof the Classesare entitledto
3 restitution.
4
5 CLAIMS F'ORRELIEF
6 COUNTI
7 Extortion
Cal.Pen.Codcgg518-19
8 (With Respectto the SponsorPlaintiffsand SponsorClass)
9
l0 183. Plaintiffsreallegeand incorporate
the allegations
elsewhere
in t}le
l 1 Complaint
asifset forthin full herein.
12 184. By the advertising
andreviewingpraotices
of Yelp asallegedherein,
1 3 Yelp obtainedthe propertyof the SponsorPlaintiffs andmembersof the Sponsor
l 4 Class,with their consent,though the threatto do an unlar,r.f..rl
injury to the person
1 5 or propeftyofthe Sponsor
Plaintiffsandmembers
ofthe Sponsof
Classthreatened.
16 185. Yelp'sconductconstitutes
a violationofCal.Pen,Codegg518-19.
17 COUNTII
t8 AttemptedExtortion
19 Cal.Pen,Codeg 524
(With respectto All PlaintiffsandAll Classes)
20
2l 186. Plaintiffsreallegeand incorporate
the allegations
elsewhere
in the
22 Complaint
asif setfonhin fullherein.
23 187. By the adverlisingandreyiewpracticcsof Yelp as allegedherein,
24 Yelp attemptedto obtainthe propertyof Non-SponsorPlaintiffs ard membersof
25 the Non-Sponsorclass,with their consent,throughthe threatto do an unlawful
injury to the personor propertrrof theNon-Sponsor
Plaintiffsarrdmembersofthe
27 Non-Snonsor
Class.

35
I n sTAI-GNDEDCoLfLArNT
1 188. Yelp had a specificintentto commitExtortion,in violationof Cal.
2 Pen.Code$$518-19,against
theNon-sponsorPlaintiffsarrdNon-Sponsor Class.
3 189. Yelp engagedin one or more direct ineffectual acts towardsthe
4 commissionof Extortion againstthe Non-sponsorPlaintiffs and membersof the
5 Non-Sponsor
Class.
6 190. TheNon-Sponsor
Plaintiffsandmembersof the Non-sponsor
Class
7 wereharmedasa resultof Yelp'sactions.
8 191. The foregoingconstitutes
AttemptedExtortionin violationof Cal.
9 Pen.Code$ 524.
10 COUNTIII
1l IntentionalInterferenceWith Prospective EconomicAdvantage
12 (With Resp€ctto All PlaintiffsandAII Classes)

t3 192. Plaintiffsreallegeand incorporate


the allegations
elsewhere
in the
T 4 Complaint
asifset forthin full herein.
l) 193. There existedeconomicrelationshipsbetweenthe Non-Sponsor
t 6 PlaintiffsandNon-Sponsor
Classmembers,andthirdparties,with theprobability
1 7 of futureeconomicbenefitto theNon-Sponsor
PlaintiffsandNon-soonsor
Class
1 8 Members.
t9 194. Yelpknewoftheserelationships.
20 195. Yelp intentionally
committed
wrongfulactsdesigned
to disruptthose
2 I relationships.
22 196. Thoserelationships
wereactuallydisrupted.
23 197. TheNon-Sponsor
PlaintiffsandNon-Sponsor
Classmembers
suffered
24 economic
harmproximately
caused
by Yelp'sacts.
25
26
27
I COUNT IV
2 Violationsofthe Unfair CornpetitionLaw
3 Cal.Bus.& prof. CodeS 17200
(With Respectto All PlaintiffsandAlt Classes)
4
5 198. Plaintiffsreallegearrdincorporate the allegationselsewhcre
in the
6 Complaint
asifsetforthin full herein.
7 ''Unlawful"
8 199. Yelpviolated
Cal.Pen.Codegg518-19.
9 200. YelpviolatedCal.Pen.Codeg 524.
l0 201. Yelp intentionallyinterferedwith prospective
economicadvantages
1 l heldby theNon-Sponsor
Plaintiffsandmembers
oftheNon-sponsor
Class.
t2 202. Yelp violated16 C.F.R.Part 255 by failing to disclosethat the
l 3 Yelp.comwebsiteprovidesendorsed
reviewsofSponsors.
I4 203. The praoticesof Yelp complained
of hereinthereforeviolatedthe
l 5 "unlawful"prongof theCalifomiaUnfairCompetition
Law.
l6 "Unfair"
17 204. The practices of Yelp complainedof herein are immoral,
1 8 unscrupulous,
andoffendpublicpolicy.
t9 205. The practicesof Yelp complained
of hereinhad no counteruailing
20 benefitto consumersor competitionwhen weighedagainstthe harm causedby
2 l suchpracticas.
22 206. The practicesof Yelp complained
of hereinthereforeviolatedthe
"unfair" prong of the California Un:fairCompetitionLaw.
24 'Fraudulent"

25 207. Yelp's conductconstitutes"fraudulent"businessacts and practices


zo becausethe conduct has a tendencyto deceivethe Plaintiffs and the Classes,and
27 the generalpublic.

37
FIRSTAMENDED
CoMpLAt,rr
I 208. The advertisingsalesandemployeereviewingpracticesof Yelp as
2 allegedhereinthereforeviolatedthe ,.fraudulenf,prong of the CalifomiaUnfair
3 CompetitionLaw.
4 PRAYERF'ORRELIEF
5 WHEREFORE,Plaintiffs, on behalf of themselves,all otlrers
6 similaxlysituated,and the generalpublic, pray for judgmentand relief against
7 Yelp!Inc.asfollows:
8 A, Declaringthis actionto be a properclassactionandappointing
the
9 undersigned
law films asclasscounsel;
10 B. An orderpemanentlyenjoiningYelp from engaging
in thepractices
ll complained
ofherein;
12 C. Al order compellingYelp to disgorgeall monies,fevenues,and
l 3 profitsobtained
by meansofits $rongfulactsandpfaotioes;
14 D. An orderrequiringYelpto payfestitution
to restoreall fundsacquired
l) by meansofany actor practicedeclared
by thisCourtto beunlawful,pluspre-and
l 6 post-judgmentinterest
thereon;
l7 E.
Damagessufferedas a resultof Yelp's acts,in an amountto be
1 8 determined
at trial;
19 F. Punitivedamages;
20 G. Costs,expenses,
andreasonable
attomeys,
fees;and
21 H. Any other and fuither relief the Court deemsnecessary,just, or
22 proper.

24
25
26
27
1 JURY DEMAIID
2 rtalnTllTs
oemanda tnal bv turv.
3
4 DATED:March16,2010 Respectfully
Submitted,
5
6
7
8
THEWESTONFIRM
9 GregoryS. Weston
l0 JackFitzgerald
888TurquoiseStreet
1l SanDiego,CA 92109
l2 Telephone: (858)488-1672
Facsimile:(480)247-4553
t3
T4 BECK & LEE BUSINESSTRIAI
LAWfT,RS
15 JaredH. Beck
t6 ElizabethLeeBeck
Courlhouse PlazaBuilding
t7 28 WestFlaglerStreet,Suite555
18 M i a m iF
, L 33130
Telephone: (305)789-0072
19 Facsimile:(786) 664-333 4
z0
Attorneysfor Plaintiffs and the
2l ProposedClasses
22
23
a/l

ZJ

26
27

39
FIRST AMENDED CoMPLAINT

You might also like