A crackdown on posting fake online reviews has concluded with 19 companies agreeing to stop the practice and pay fines totaling more than $350,000, according to Attorney General Eric Schneiderman's office.
The year-long investigation, dubbed "Operation Clean Turf," targeted the practice of posting fraudulent positive reviews, known as "astroturfing." The office found that many companies specializing in search engine optimization frequently offered online "reputation management" as part of their services.
Nineteen companies have agreed to cease the practice and pay fines ranging from $2,500 to just under $100,000, according to Schneiderman's news release.
Companies that signed the agreement include a charter bus operation, a teeth-whitening service, a cosmetic surgery center, and a laser hair-removal chain. Several reputation-enhancement firms that produced the positive reviews also signed the agreement.
The New York Times, which first reported the settlement Monday morning, reported Schneiderman's action was the most comprehensive crackdown to date on fake online reviews.
Michael Luca, assistant professor of Business Administration at the Harvard Business School, said it's not surprising that businesses have resorted to fake online reviews to boost their bottom lines.
"Yelp has been and similar sites have been transformative in a lot of ways in the industry and one of the most striking trends is that crowd sourced information has helped small businesses, independent restaurants, independent hotel chains to start to gain traction relative to businesses that were spending a lot more on marketing and branding," Luca said.
Luca published a study this month that found roughly 16 percent of restaurant reviews on Yelp were fraudulent. He said while it's difficult for consumers to tell which reviews are fake and which are real, there are some clues.
"If it's something that's written by someone without an established reputation, who hasn't left many other reviews, and it's hard to identify who the person is, then I start to get a little bit suspicious of the content," Luca said.
Luca also said online review sites like Yelp, Angie's List and MenuPages could cut down on fake reviews by making it harder to leave reviews or by requiring reviewers to use their real names.
To hear a full interview with Michael Luca, click audio above.
Here is a full list of the companies who signed the agreement:
- A&E Wig Fashions, Inc. d/b/a A&E and NYS Surgery Center
- A.H. Dental P.C. d/b/a Platinum Dental
- Body Laser Spa Inc.
- The Block Group, LLC, d/b/a Laser Cosmetica and LC MedSpa, LLC
- Bread and Butter NY, LLC d/b/a La Pomme Nightclub and Events Space
- Envision MT Corp.
- Medical Message Clinic and HerballYours.com
- Metamorphosis Day Spa, Inc.
- Outer Beauty, P.C., Lite Touch Plastic Surgery, P.C., Staten Island Special Surgery, P.C., Sans Pareil Surgical, PLLC
- Stillwater Media Group
- Swan Media Group, Inc. and Scores Media Group, LLC
- US Coachways Limousine, Inc. and US Coachways, Inc.
- Utilities International, Inc. d/b/a Main Street Host
- The Web Empire, LLC
- Webtools, LLC and Webtools Internet Solutions Ltd.
- West Village Teeth Whitening Service, LLC; Magic Smile, Inc., aka Magic Smile
- XVIO, Inc.
- Zamdel, Inc. d/b/a eBoxed