Every butcher, baker, and candlestick maker who has ever contemplated the dark arts of online reputation management should take note: The seemingly benign practice of posting fake business reviews isn’t so benign these days.
A month ago Yelp (YELP), sued a San Diego lawyer for planting fake reviews about his solo practice in California state court. Today, New York Attorney General Eric Schneiderman announced a deal with 19 businesses that agreed to stop writing fake reviews and pay more than $350,000 in penalties. Yelp and Schneiderman, powerful players stooping to take on local business owners, each asserted that posting fake reviews violates false advertising laws.
Schneiderman’s announcement today about the state’s yearlong investigation is bizarre. State investigators pretended to be the owners of a fictitious Brooklyn yogurt shop in order to nab a handful of search engine optimization companies that posted positive reviews for clients. The attorney general also entered into agreements with an odd assortment of real local businesses, including a teeth-whitening boutique, several laser hair removal spas, a strip club franchise, and a charter bus company.
“This investigation into large-scale, intentional deceit across the Internet tells us that we should approach online reviews with caution,” says Schneiderman in a statement. It shouldn’t have taken a yearlong investigation to figure that out: As the attorney general’s press release points out, a year-old Gartner study predicts that 10 percent to 15 percent of reviews will be fake by 2014.
There’s good reason to try to game the system. Research generally indicates that people place faith in consumer reviews, buying from businesses that appear to be well liked. That presents a predicament for such companies as Yelp and Angie’s List(ANGI) that want to be known for providing trustworthy recommendations, as well as government officials charged with protecting consumers.
Customers are vulnerable to being duped. Because bogus reviews are effective, lots of businesses are planting fakes. As Schneiderman points out, there’s even a cottage industry of companies that specialize in getting planted reviews past algorithmic filters and employing freelancers from far-flung locales such as Bangladesh and the Philippines to write positive notes.
Suing violators is hardly scalable, and computer algorithms are probably a better bet than undercover prosecutors for sniffing out bogus reviews. That doesn’t mean small business owners—many of whom already feel antagonized by local reviews sites—shouldn’t heed the recent lawsuits. Lawsuits alone may never stop companies from posting fake reviews, but no business owner wants to get stung.