Yelp Says FTC Has Ended Second Inquiry Into Its Practices, Software

(Los Angeles Times/TNS) -

The Federal Trade Commission ended a nearly year-long inquiry into Yelp’s business practices and its recommendation software without taking any action, the company said in a blog post.

The FTC examined how Yelp’s business-review software functions, how the company describes the software to businesses and how the company ensures that employees are not able to manipulate ratings or reviews, Yelp Vice President Vince Sollitto said in a post this week.

Small businesses have accused Yelp of manipulating ratings or pressuring them into advertising on the popular review site.

It is the second time the FTC has looked at the company’s advertising practices and not taken action, Sollitto said.

An FTC spokesman had no comment.

A suit accusing Yelp of extorting small businesses was dismissed in September by the U.S. 9th Circuit Court of Appeals in San Francisco.

The lawsuit was filed by several small businesses that said Yelp removed positive reviews or wrote negative reviews to pressure the companies into paying for advertising.

The court said the plaintiffs did not have preexisting rights to positive reviews and failed to prove that Yelp wrote negative critiques.

On Thursday, Yelp shares rose $1.62, or 3.1 percent, to $53.83. In after-hours trading, the shares lost 8 cents to $53.75.