Based on your account, and a glance at the complaint, I look at this lawsuit with a skeptical eye (doesn't mean it isn't valid, but I wonder). Why? The compla

Based on your account, and a glance at the complaint, I look at this lawsuit with a skeptical eye (doesn't mean it isn't valid, but I wonder). Why? The complaint alleges one actual incident of alleged wrongdoing, most occurring within the past few weeks. The rest of the allegations are based entirely on complaints reported in news accounts, meaning that the plaintiff's lawyers basically pasted hearsay statements into their legal document. When this is coupled with the fact that their entire legal theory of the case consists of three paragraphs alleging violation of California's unfair competition law, Bus. & Prof. Code 17200, I think it is fair to say that this filing is pretty superficial. The complaint alleges that "negative reviews would be removed or relocated" for the benefit of advertisers but waters this down by saying "or those pages would otherwise be favorably manipulated, including through [the advertiser's] own input or control." This allegation would literally be true in light of Yelp's business practice (as you put it) of allowing an advertiser to move one favorable review to the top of the review order but, though true, may also be irrelevant unless it is first determined whether the particular business practice of moving one review up is in itself illegal. The remaining allegation that advertisers were threatened is also hedged with the qualifier "implicitly or expressly," which may mean that no overt threats were made and may (of more significance to the class action issue) involve scattered incidents as opposed to company-sanctioned policy. This story has been out for about a year. Within the very recent past, Yelp just raised another $25M from sophisticated investors. Those investors certainly looked into these issues deeply in due diligence (including the legal issue whether moving one favorable review to top position violated unfair competition laws) and yet still felt comfortable investing. My guess is that this fact suggests that the practices engaged in here were not so systematic as to constitute company policy. Such practices, if they did exist at that systematic level, would be far too easy to expose, if nothing else simply by getting statements from former Yelp employees. Investors are not stupid and would almost certainly have not invested in that type of extreme situation. This would suggest a flawed sales pitch, as you mention, rather than systematic malevolent company policy. If that guess is right, then Yelp will likely have to change that pitch and may even have to pay out nuisance money in time to settle this action. But it will likely not be more than that. And that is probably the calculus the investors took into account in deciding to plunk their $25M into Yelp in recent weeks. A lawsuit, of course, must stand or fall on its own merits, but the surface indicators here suggest that this is a comparatively weak case and not a strong one.