Menu
FTC ends inquiry into manipulated reviews on Yelp

FTC ends inquiry into manipulated reviews on Yelp

Some businesses claimed Yelp strong-armed them into buying ads.

Yelp's landing page on the desktop.

Yelp's landing page on the desktop.

The U.S. Federal Trade Commission has ended a nearly year-long inquiry into Yelp's businesses practices, after some companies claimed they received unfair or fraudulent reviews after turning down pitches to advertise.

"After nearly a year of scrutiny, the FTC decided to close its investigation without taking further action," Yelp said Tuesday in a blog post.

For its review, the FTC looked at Yelp's recommendation software, what Yelp employees say to businesses about it, what Yelp's salespeople say about its advertising programs, and how Yelp ensures that employees are not able to manipulate ratings and reviews, the company said. Yelp's recommendation software is what the company uses to determine how it ranks and presents reviews to users.

The FTC received more than 2,000 complaints filed about Yelp between 2008 and 2014, the Wall Street Journal reported last year after a Freedom of Information Act request. Many of the complaints came from small businesses who said that Yelp played favorites with those who paid to advertise, while hurting those who did not. Some brought their claims to court.

In one suit, an animal hospital in Santa Barbara, California, said a Yelp sales rep offered to hide their negative reviews if they purchased ads.

Yelp said Tuesday, however, that "businesses can't pay to change their ratings or reviews and our salespeople don't tell businesses otherwise." Also, the company takes steps to weed out potentially unreliable user reviews, Yelp said.

A spokesman for the FTC declined to comment.

None of the cases brought against Yelp over manipulated reviews have been successful, Yelp said. This past September, for instance, a federal appeals court said plaintiffs lacked sufficient evidence to support their claims of extortion against Yelp.

The closure of the FTC's investigation is surely welcome news for Yelp, as the company faced a separate challenge last year with regulators. In that case, the company paid a US$450,000 civil penalty to settle charges with the FTC that it improperly collected children's information.

The FTC began a previous inquiry in 2010 into Yelp's ad offerings and software; no action was taken after that inquiry either.

Zach Miners covers social networking, search and general technology news for IDG News Service. Follow Zach on Twitter at @zachminers. Zach's e-mail address is zach_miners@idg.com


Follow Us

Join the New Zealand Reseller News newsletter!

Error: Please check your email address.

Tags advertisingInternet-based applications and servicesyelplegalsocial networkingsocial mediainternet

Featured

Slideshows

Kiwi channel comes together for another round of After Hours

Kiwi channel comes together for another round of After Hours

The channel came together for another round of After Hours, with a bumper crowd of distributors, vendors and partners descending on The Jefferson in Auckland. Photos by Maria Stefina.​

Kiwi channel comes together for another round of After Hours
Consegna comes to town with AWS cloud offerings launch in Auckland

Consegna comes to town with AWS cloud offerings launch in Auckland

Emerging start-up Consegna has officially launched its cloud offerings in the New Zealand market, through a kick-off event held at Seafarers Building in Auckland.​ Founded in June 2016, the Auckland-based business is backed by AWS and supported by a global team of cloud specialists, leveraging global managed services partnerships with Rackspace locally.

Consegna comes to town with AWS cloud offerings launch in Auckland
Veritas honours top performing trans-Tasman partners

Veritas honours top performing trans-Tasman partners

Veritas honoured its top performing partners across the channel in Australia and New Zealand, recognising innovation and excellence on both sides of the Tasman. Revealed under the Vivid lights in Sydney, Intalock claimed the coveted Partner of the Year 2017 (Pacific) award, with Data#3 acknowledged for 12 months of strong growth across the market. Meanwhile, Datacom took home the New Zealand honours, with Global Storage and Insentra winning service provider and consulting awards respectively. Dicker Data was recognised as the standout distributor of the year, while Hitachi Data Systems claimed the alliance partner award. Photos by Bob Seary.

Veritas honours top performing trans-Tasman partners
Show Comments