Yelp Lawsuit Lesson: Fake Reviews Can Be Costly

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By Aditi Mukherji, JD on September 12, 2013 12:08 PM

A recent Yelp lawsuit is a reminder to business owners that writing fake Yelp reviews to boost your reputation can come back to haunt you in court.

Yelp has sued McMillan Law Group -- a San Diego bankruptcy law firm that allegedly posted fake reviews -- for breach of contract, unfair competition and false advertising.

Though firm owner Julian McMillan is claiming Yelp filed the lawsuit out of spite, business owners should err on the side of caution and never post fake reviews on Yelp.

Fake Reviews Lawsuit

In the second lawsuit of its kind, Yelp sued McMillan for allegedly posting fake reviews to his own Yelp page, as well as others' pages in a quid pro quo arrangement with other local attorneys, reports Ars Technica.

The complaint accuses McMillan employees of creating Yelp accounts to post fake glowing client reviews.

Yelp determined the reviews weren't authentic when they were able to trace the reviews to the McMillan Law Group's IP (Internet Protocol) addresses.

Yelp is seeking damages for breach of contract by violating its terms of service, for intentional interference with contractual relations (by harming the site's reputation via fake reviews), for unfair competition, and for false advertising.

Revenge Lawsuit?

McMillan believes Yelp is pursuing the "fake reviews" lawsuit against his firm to get revenge, reports Ars Technica.

Yelp is facing a firestorm of extortion criticism over mafia-like sales reps allegedly promising to hide negative reviews if businesses pay for expensive advertising.

Earlier this year, McMillan sued Yelp in a small claims case about the company's thuggish sales tactics -- and won.

The Wall Street Journal reports the judge in the case described Yelp's advertising practices as contracts of adhesion resulting from "the modern-day version of the mafia going to stores and saying, 'You wanna not be bothered?'"

But alas, an appellate court overturned the decision last month.

Regardless of the e-Gangs of New York drama and what Yelp's actual motive is behind the lawsuit, it's probably best to play it safe and not post fake glowing reviews -- lest you wake up to a bloody horse head on your bed.

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