As phonebooks become a thing of the past, local and small businesses now rely more than ever on the internet to get the word out about their services. However, the social nature of today’s web makes it hard work for business owners to control how their business is perceived. A bad review can stick around forever, and the anonymous nature of the net can make it impossible to investigate claims or offer recompense.

On Yelp in particular, bad or vindictive reviews can often hurt the reputation of a small business. Millions of people each month rely on the site to find local businesses, and low ratings can mean the difference between sales and bankruptcy. Add to this the fact that Yelp’s business model runs on selling advertising to the very business’ that inhabit its website and the situation becomes one that can cause resentment from business owners who are trying hard to promote their services on a limited budget.

Have a Yelp horror story? Let us know about it in the comments.

Within this climate, it isn’t surprising that Yelp has been sued multiple times by people who all but claim (though some explicitly claim) that Yelp is extorting small businesses. These claims include the hiding of positive reviews and the placing of competitor ads on business review pages.

For its part, Yelp has strenuously denied being a racket and has generally come out on top in lawsuits. Through multiple blog posts and reports, Yelp has tried to explain how it attempts to filter out reviews that it sees as fake. These would include reviews from business owners themselves, as well as reviews from companies that sell false Yelp reviews.

Now, after being on the defensive in lawsuits and implementing features such as consumer alerts on its website, Yelp appears to be going on the offensive. Yelp is now suing sites that sell false reviews for its website. As recently as June of this year Yelp filed a lawsuit against the provocatively-named website BuyYelpReview.com (it’s gone now). This week, a new Bloomberg report points out that Yelp may even now be targeting individual business owners who file false reviews.

The report centers on a San Diego lawyer named Julian McMillian who sued Yelp in small claims court over an ad deal and actually won. He then began soliciting other businesses who had grievances with Yelp. Though his victory was overturned on appeal, Yelp seems to have used the case as an opportunity to dig into McMillian’s Yelp comments. Yelp is now suing the man for more than $25,000 for allegedly planting fake reviews on his business page.

Being sued by Yelp is a notion that could easily strike fear into the hearts of small business owners – and that’s likely the point. By making an example of an unscrupulous business owner, Yelp could be hoping to deter others from creating their own astroturf reviews or turning to fake Yelp review sellers. It’s a tactic that the MPAA embraced years ago, suing individuals (including clueless parents) who had pirated copyrighted content using Bittorrent. And as with piracy, the tactic would be unlikely to work for Yelp.

On a basic level, suing small business owners directly could easily increase resentment from those that struggle with poor reviews. For those who already believe that Yelp gives review-filter favors to business that advertise with them, this could simply be seen as Yelp shutting down their competition.

On a technical level, Yelp uses an algorithm to determine what reviews should be hidden on a business Yelp page. As Google knows, it can be hard to stay a step ahead of scammers trying to game an algorithm. It’s a constant process that takes expertise and creativity to manage, and even then the legions of spammers working against an algorithm always seem to find a way to game it.

It’s a problem that will almost certainly never be fully solved. There simply isn’t enough manpower to check every Yelp review thoroughly. Though Yelp likely accounts for some amount of false reviews in its star ratings system, individual reviews would still require a human touch to completely verify. For better or worse, Yelp and small business owners seem to be bound to each other out of necessity – with false reviews making it difficult for both sides to trust the other.

Is there some way for Yelp to filter fake reviews that doesn’t risk hurting small businesses? Let us know your ideas in the comments.