FTC Takes No Action Against Yelp Following Year-Long Investigation Into Review System Despite outcry from small-business owners, this marks the second inquiry by the FTC that has resulted in no further action, according to Yelp.
By Geoff Weiss
Opinions expressed by Entrepreneur contributors are their own.
Though Yelp has earned the ire of thousands of small business owners across the country who allege the service manipulates reviews in order to sell them ads, the Federal Trade Commission (FTC) has just concluded a year-long investigation and "will not be taking any action against Yelp," according to the company's official blog.
This marks the second time that the FTC has looked into Yelp's advertising practices and review software without taking any action, the company said.
Last April, The Wall Street Journal reported that the FTC had received 2,046 complaints about Yelp from 2008 to March 4 -- mostly from small business owners claiming unfair or fraudulent reviews. Yelp called this number "small, especially when viewed in context of the tens of millions of reviews on Yelp," and added that, "many of them appeared to be from businesses that simply weren't happy with their ratings or reviews on Yelp."
Many business owners also grumble that Yelp is slow to remove fake reviews, which can be particularly detrimental.
The investigation marks Yelp's second legal triumph of late. In September, a federal appeals court ruled that Yelp's sales tactics do not in fact extort businesses but should rather be classified as "hard bargaining."
Related: Researchers Are Using Yelp to Predict When a Restaurant Will Shut Down
