Before you join Yelp's global peanut gallery - either as a business braced for judgment or as a discerning consumer - you might want to check the Terms of Service. Yelp clearly reserves "worldwide, perpetual, non-exclusive, royalty-free, assignable, sublicensable, [and] transferable" rights to your words. Now, what material Yelp will actually post, and with what prominence, are becoming matters of significant dispute.
McMillan Law Group in San Diego learned this the hard way. The three-person firm won a ruling that Yelp Inc. coerced it to contract for services Yelp never provided (including boosting the firm's visibility on its site). After the judgment was vacated and sent to arbitration, Yelp sued McMillan, claiming the firm was "stacking the deck in their favor with planted or fake reviews." No stars for them.
Yelp says it's just protecting consumers. Attorney Julian McMillan wonders if revenge is in play. "Here we have a $4.7 billion corporation suing a community bankruptcy firm," he says. "And it's because we figured something out about them and embarrassed them with it."
New York's attorney general, Eric. T. Schneiderman, settled in September with 19 companies that hired third parties to write fake online reviews. "When you look at a billboard, you can tell it's a paid advertisement - but on Yelp or Citysearch, you assume you're reading authentic customer opinions," Schneiderman told the New York Times. The California attorney general's office said it "and other enforcement agencies are looking at" the issue.