Yelp Says That The FTC Investigation Of Yelp Is Complete

Image courtesy of colonelchi

The Federal Trade Commission has received a lot of complaints about Yelp––more than 2,000 from 2008 through last spring. These led to what Yelp calls “a deep inquiry into our business practices” by the FTC, which has lasted almost a year. Today, Yelp announced that the feds have closed their investigation, and won’t be taking any action against Yelp regarding its business practices.

The company did recently pay a $450,000 civil penalty after a separate FTC investigation into its data collection practices regarding minors, but that’s separate from the repeated allegations that businesses and advertisers have made about the site’s review filtering and sorting methods.

The FTC hasn’t released any information about the end of this investigation, and declined to comment to the Wall Street Journal about it. Yelp says that the feds have spent the last year investigating the company. One component of the business that the agency investigated were the recommendation software that determines which reviews site users see and see first. Another item of interest was whether site employees have the ability to directly manipulate reviews according to the size of a business’s ad buy. Investigators apparently found nothing amiss, and closed the investigation.

A frequent criticism of the company has been that it solicits restaurants and other small, local businesses to sell ads, then threatens to hide positive customer reviews when those businesses decline to buy ads. While none of the accusers have been able to produce solid evidence of one of these advertising shakedowns, last year a federal judge ruled that Yelp isn’t legally obligated to present reviews in any order, and could give preferential ranking to advertisers if it wanted to. The company insists that it doesn’t, of course, but the end of a previous FTC investigation didn’t stop accusations from business owners.

FTC Closes Investigation of Yelp, Takes No Action [Yelp Official Blog]

Want more consumer news? Visit our parent organization, Consumer Reports, for the latest on scams, recalls, and other consumer issues.