ROBERT SIEGEL, HOST:
Now to the other big tech story of the day. Nineteen companies have reached a settlement with the New York state attorney general to stop posting fake reviews on sites like Yelp and Citysearch. These are sites that let consumers rate products, restaurants and services. The agreement comes after a year-long investigation into the practice of using false reviews to enhance the online reputation to businesses. NPR's Laura Sydell joins us now to talk about it. Hi, Laura.
LAURA SYDELL, BYLINE: Hi.
SIEGEL: And first, what exactly were these firms doing?
SYDELL: Well, the attorney general used an undercover agent who posed as the owner of a local yogurt shop in Brooklyn, and the agent called around to what are called reputation management companies, asking for help dealing with negative reviews online. Many of these online reputation companies said they could offer up some fake reviews to help counter the bad ones.
And the New York attorney general found that the reputation management companies were paying people from as far away as Bangladesh to write the reviews between - they were paying between one and $10 to pretend they've been Brooklyn. There's a term used for that these days. It's called astroturfing.
SIEGEL: Right. I'm sorry to laugh at this criminality that's been described. But who are some of the companies and firms cited in the settlement agreement?
SYDELL: Well, there are reputation firms like Zamdel Inc. And the AG also charged a few business with trying to get their own employees or paying people to review them, and that included a company like US Coachways, which is a national charter bus company on Staten Island and Body Laser Spa and a Medical Message Clinic.
SIEGEL: OK. So it was misleading, unethical. But what law is violated here?
SYDELL: Well, the AG is using old laws here. Essentially, the AG, the attorney general, says this is the 21st century version of false advertising. And they've got a whole bag of laws on the books all ready to deal with it.
SIEGEL: Any response from, say, the online review sites like Yelp?
SYDELL: Yelp says it welcomes the actions by the New York attorney general, and the company says it has its own tools to try and detect fake reviews. The only thing I should say is that Yelp itself has been accused of calling business owners and saying, hey, we'll put more positive reviews up higher on the list so people see them for a price. So Yelp's got its own problems.
SIEGEL: How much do people really rely on these reviews to make decisions about products, restaurants, so forth compared to, say, someone you know telling you that's a good restaurant?
SYDELL: Well, actually, there have been studies of this, Robert, and these reviews can really help or hurt a business. According to one survey, 90 percent of consumers say online reviews influence their buying decisions. And a highly cited study by Harvard found that a one-star rating increase on Yelp translated into a five to nine percent increase in revenue. So people really do rely on them.
SIEGEL: Ok. Thank you, Laura.
SYDELL: You're welcome.
SIEGEL: That's NPR's Laura Sydell.
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