New York regulators have fined 19 companies a total of $350,000, after a year-long sting operation found that these businesses had deceived consumers by posting fake online reviews.
New York State Attorney General Eric T. Schneiderman on Monday announced the penalties for the companies, adding that fake reviews were in violation multiple state laws against false advertising.
"Consumers rely on reviews from their peers to make daily purchasing decisions on anything from food and clothing to recreation and sightseeing," Schneiderman said.
“And companies that continue to engage in these practices should take note: ‘Astroturfing’ is the 21st century's version of false advertising, and prosecutors have many tools at their disposal to put an end to it."
Among the businesses charged included a teeth-whitening service, a laser hair-removal chain and an adult entertainment club for men. The companies had allegedly hired search-engine-optimisation firms and freelance writers from as far away as the Philippines, Bangladesh and Eastern Europe to post positive reviews for their businesses.
As part of the investigation, dubbed Operation Clean Turf, New York regulators posed as a fake yoghurt shop in Brooklyn to ensnare fake online review companies.
The fake review charged anywhere from $1-$10 for a positive review, before posting them on consumer-review websites such as Yelp.com, Google Local and Citysearch.com.
The investigation also revealed that the fake online review companies were using advanced IP spoofing techniques to hide their identities, as well as setting up hundreds of bogus online profiles on consumer review websites.
Yelp.com, which was found to have the most aggressive filters against detecting and filtering fake reviews, said that it would continue to work with the New State Attorney General as well as other law enforcement agencies to protect consumers against misleading information.
“More than 100 million visitors come to Yelp each month, making it critical that Yelp protect the integrity of its content," said Aaron Schur, Yelp's Senior Litigation Counsel, in a statement. "We take many steps to do this, including the use of automated filtering software, leveraging our vast user community for tips about suspicious content, undercover sting operations, legal action, and cooperation with law enforcement.”
“No human can filter or unfilter a review,” Yelp added in an email to the Financial Times. Though Yelp acknowledged that the algorithm “sometimes filters perfectly legitimate reviews . . . but it’s the high cost we have to pay in order to make sure that the majority of the content on the site is as useful as possible to consumers.”
The Entire List Of Companies Fined For Fake Online Reviews Can Be Found At The New York State Attorney General Website