New York Cracks Down on Companies That Buy Fake Online Reviews

In a business climate where Google reviews and stars on Yelp can have a real imact on your bottom line, buying your way into the good graces of the online community could seem like a no-brainer. But businesses may want to think again.

The New York Attorney General announced a crackdown today after an investigation into businesses -- local companies like restaurants, taxi services, hair and nail salons and clothing retailers -- that create fake reviews and post them to sites like Yelp and Google. The investigation into the practice, called "astroturfing," led to 19 New York companies, including a laser hair-removal service and a charter bus company, agreeing to pay a total of $350,000 in fines for engaging in the deceptive practice.

"Consumers rely on reviews from their peers to make daily purchasing decisions on anything from food and clothing to recreation and sightseeing," New York Attorney General Eric T. Schneiderman said in a statement. "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." 

A study last year by technology research firm Gartner estimated that by 2014 as much as 15 percent of reviews on social media sites could be fake and paid for.

Although the investigation was targeted only at companies operating in New York, Yelp believes it will have wider implications. "This shows that fake reviews are a legitimate target of law enforcement," Aaron Schur, senior litigation counsel for Yelp, told the New York Times.

Related: Yelp: We Won't Stand for Businesses That Pay for Fake Reviews