Yelp Inc. is stepping up its campaign against a serious threat to its business model: fake reviews.
The online reviews service is taking aim at businesses and individuals who try to game the site by posting bogus reviews, usually ladling out praise.
But the battle is a tricky one. It essentially exposes a weakness in Yelp’s own business and recently revived allegations about the way the company deals with small businesses reviewed on its site.
Yelp’s more aggressive stance includes taking alleged fake-review publishers to court. Last month, Yelp sued a San Diego law firm for allegedly publishing fake reviews praising its work. In June, the company sued AdBlaze in San Francisco federal court, accusing the online marketing firm of “selling Yelp reviews from unknown accounts to unknown third parties.”
“While online reviews are a great resource for consumers to learn about local businesses, unfortunately some try to game the system, and build a business on selling fraudulent content,” Yelp said in filing the suit against Timothy Catron of AdBlaze. AdBlaze could not immediately be reached for comment.
Harikesh Nair, a marketing professor at the Stanford Graduate School of Business, said the legal offensive shows the importance of legitimate reviews to Yelp.
“Providing honest reviews is really critical for a platform like this,” he told MarketWatch. “The issue they are concerned about is trust. And they probably want to signal that they would go after violators, since trust is important to their business model.”
Eric Goldman, a law professor of Santa Clara University, echoed this point, noting how other online reviews companies have also decided to take legal action against businesses they believe are gaming their sites. “No doubt we’re seeing more lawsuits over fake reviews than we’ve seen in the last few years,” he told MarketWatch.
But, he continued, “lawsuits over fake reviews are a mixed bag.”
“On the one hand, they’re signaling to the review website’s users that they are aggressively fighting fake reviews,” he said, but on the other hand is “the implication that the site is having difficult curbing fake reviews.”