In an online sting operation called Operation Clean Turf, the New York Attorney General's office (unsurprisingly) found "companies had flooded the Internet with fake consumer reviews on websites such as Yelp (YELP -6%), Google Local, and CitySearch." (PR)
It wasn't just business owners who were responsible. Leading search engine optimization (SEO) firms offered to write fake reviews for undercover investigators, and used techniques such as IP address spoofing and the establishment of "hundreds of bogus online profiles" to write them.
Following the investigation, 19 firms have promised not to write fake reviews for themselves or clients, and to pay a combined $350K+ in fines.
Yelp, which provided a statement in the AG's PR praising the investigation, has been trying to deal with its fake-review problem by tagging businesses guilty of writing/paying for them and automatically filtering questionable reviews. More recently, the company sued a law firm for posting fake reviews.
Angie's List (ANGI +4.4%), which requires users to subscribe to its service (and thus provide it with billing data) to read and post reviews, closed up strongly. Yelp remains up over 3x YTD.
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