One of the biggest and most influential review platforms in the world, Yelp has constantly been hit with claims that it manipulates reviews so its advertisers get higher rankings. This led to an investigation by the Federal Trade Commission in early 2014 after 2,045 complaints were filed against the company. Now Yelp says the FTC has closed its investigation into Yelp’s business practices and decided not to take action.
In a blog post, the company stated:
“The FTC looked into our recommendation software, what we say to businesses about it, what our salespeople say about our advertising programs, and how we ensure that our employees are not able to manipulate the ratings and reviews that we display on our platform. After nearly a year of scrutiny, the FTC decided to close its investigation without taking further action. This marked the second time that the FTC had looked at our advertising practices and ended its inquiry without further action.”
It also claimed that many of the complaints filed with the FTC “appeared to be from businesses that simply weren’t happy with their ratings or reviews on Yelp.”
This is the second time that the FTC has investigated Yelp’s business practices, with the first one also being closed without any further action.
Furthermore, a federal appeals court ruled in September that even if Yelp does indeed award higher rankings to businesses that purchase ads on its platform, it would not be against the law.
While Yelp has scored a round of legal victories, it is still under pressure from investors who were disappointed in the sales forecast it issued in its third-quarter earnings report last October. The company said it is currently focused on scoring paid accounts, as well as expanding into international markets through a series of acquisitions.