EP 253 - Yelp Strikes Back + The FTC’s Review Fraud Hit List
Yelp leverages the Google antitrust ruling while the FTC targets small law firms for review fraud. Plus: Google’s new LSA scraping and the death of the Local Pack?
This week’s Near Memo explores the legal and regulatory pressures squeezing Google and local businesses alike. Mike shares FOIA results revealing the specific small businesses the FTC is targeting for incentivized reviews, while Greg analyzes Yelp’s motion to fast-track their antitrust case following the historic Mehta ruling. We also look at the technical expansion of LSAs and why "Ask Maps" might be the conversational interface that finally replaces the traditional local pack.
The Podcast Deets & Take-Aways
- The Review Pressure Cooker: Analysis of new Google guidelines regarding "undue pressure" in review solicitation and the (non?) risks of using QR codes and employee names.
- FTC's Small Business Review Crackdown: A breakdown of FOIA data showing which small-to-mid-sized firms (legal/property management) for review fraud and incentivized "friend and family" reviews the FTC is targeting.
- LSA Expansion & Scraping: Google's move to bring Local Services Ads to restaurants and the technical shift toward scraping landing pages to auto-generate ad content.
- The Yelp vs. Google Endgame: Yelp’s strategic use of the "Mehta" antitrust ruling to fast-track their own litigation and how the potential rise of "Ask Maps" as the new local UI may make any Yelp victory hollow.
Related Links
Claudia Tomina
Near Media
Greg Sterling
Eric Levine
Near Media👇 Watch by topic:
00:00 - Introduction & Near Memo Kickoff
01:07 - The Truth About Google’s "Review Pressure" Rules
06:51 - Yelp's New Solicitation Survey
10:11 - FTC Warning Letters: Who’s Getting Caught?
14:47 - LSAs for Restaurants: Will They Actually Work?
19:05 - Yelp vs. Google: The "Mehta" Ruling & Antitrust Update
30:27 - The Future: Ask Maps & AI Conversational UI
Interested in sponsoring this podcast or our newsletters please reach out to mblumenthal@nearmedia.co
Full Transcript of the Near Memo EP 253
Greg Sterling:
We're back, everybody. Welcome to the latest episode of the Near Memo with me, Greg Sterling, and Mike Blumenthal, as always. Today, we will be talking about reviews once again, and also FTC enforcement actions against law firms, which is very interesting for reasons that we will get into. Then we're going to also be talking about how Google has just introduced LSAs to the restaurants category and will they be able to make any money there? In addition, they're now going to be importing information to your LSA ad from a URL website landing page. And then finally, we're going to be talking about Yelp's litigation against Google, which is a kind of a local search mirror of the antitrust suit that was successfully litigated against Google in Washington DC. So Mike, why don't you tell us about your review experiences of late?
Mike Blumenthal:
In the forums, we've been seeing a lot of review takedowns. Claudia Tomina has been doing some good research about cases where volume went way up and reviews got taken down. There are also new Google guidelines about minimizing pressure in retail locations; you shouldn't be pressuring people to leave reviews or asking them to leave specific information like employee names.
Claudia did a nice piece on LinkedIn and was on a podcast with Darren Shaw, but unfortunately, some of her nuanced understanding didn't quite make it through to the public. We're seeing reports that you should never use QR codes or employee names in reviews. I think that's not correct—it’s too black and white. The rule specifically talks about "undue pressure." From my experiments, undue pressure is a combination of things.
For example, I was at a restaurant recently that had a QR code. I left a review using the waiter’s name—I loved the waiter but hated the food—and did it via the QR code. My review is fine. I also edited an old review for a restaurant in Florida where the waiter originally pitched me to leave his name so he could get extra meals. That edited review with the name and QR code history didn't get taken down either.
Greg Sterling:
Well, Google provides the QR codes, which is problematic if they're going to spank you for using them.
Mike Blumenthal:
Right. Using employee names happens naturally. I think it's a combination of frequency plus velocity. I saw a situation in the forum where 20 names were mentioned in a single review—that got filtered, but it was 20 names for goodness sake!. In excess, it’s a problem, but in and of itself, you shouldn't stop using QR codes.
One alternative strategy discussed was asking people to do a brand search and find the review link. Your volume would go down, but you'd benefit from additional brand searches.
Greg Sterling:
I remember someone hypothesizing that if Google doesn't see a history of you searching for that business, they might treat the review as suspect.
Mike Blumenthal:
It actually works the other way. If you call the business before leaving a review, it's more likely to stick. However, "long-distance" reviews are more likely to come down.
Greg Sterling:
The larger point is that none of these factors individually automatically zaps your reviews; it's multiple factors casting a shadow.
Mike Blumenthal:
Right. It’s "review velocity delta"—the change in velocity along with names and location. Don't stress if your process is working. It’s the "pressure" issue you need to worry about.
Greg Sterling:
One adjacent thing: I was leaving a review on Yelp recently, and it asked at the bottom: "Did this business ask you to write a review?". It asks if a staff member requested it or if you got a text or email. An ordinary person will see this as a neutral question and say yes. This is going to catch a lot of companies using solicitation platforms and seems like an automatic removal scenario.
Mike Blumenthal:
It is. At GatherUp, we received a lawyer letter from Yelp early on telling us to stop soliciting reviews. We realized it was easier to just stop asking for Yelp reviews because first-time reviewers weren't getting through anyway. The only company hurt by that is Yelp.
Greg Sterling:
Yelp did have a presence in Europe but retreated because they were spread too thin or it was too expensive for compliance.
Mike Blumenthal:
Booking.com and TripAdvisor were creaming them there, too. This takes us to the FTC. Last December, they announced that 10 businesses received warning letters under the new rule against incentivized reviews. I filed a FOIA to get the names. It was one CPA, three Personal Injury (PI) attorneys, and six property management companies.
Greg Sterling:
These seem to be small businesses, which is interesting because we speculated the FTC would only go after large ones due to resource constraints.
Mike Blumenthal:
They were cited for providing $50 gift card incentives to employees in exchange for five-star reviews from family or friends who were not clients. All three PI firms used the same dollar amount, which suggests a "mastermind group" suggested the idea. They were given five days to provide a remediation plan. If accepted, there is virtually no further consequence.
Greg Sterling:
Review fraud is rampant in the legal profession. Speaking of Google making money, they’ve rolled out LSAs for the restaurants category. Historically, restaurants were the number one usage category in Yellow Pages but very low in advertising spend.
Mike Blumenthal:
Restaurant margins are tight. The question for LSAs is whether they will be cheap and effective enough to allow Google to switch their on-page model from organic to paid results.
Greg Sterling:
LSAs are also now taking the URL you provide and scraping that page for ad content. This might allow for things like coupons.
Now, onto the Yelp versus Google antitrust litigation. Yelp filed a motion for "issue preclusion," essentially saying Google must agree to the facts of monopoly power already decided in the Mehta trial. Yelp argues it’s a waste of resources to re-adjudicate those facts.
Mike Blumenthal:
Yelp is also objecting to Google wanting to dig into Yelp's internal failures to prove that Yelp's decline was due to bad business decisions, not Google's monopoly.
Greg Sterling:
Yelp is trying to take advantage of the DC decision. However, the local search market specifically was not litigated in the Mehta case, which might be problematic for this summary judgment motion.
Mike Blumenthal:
Next week, we have a panel with Crystal Tang, Claudia Tomina, Darren Shaw, and Adam Dorfman. We’ll discuss Google's "Ask Maps" AI tool.
Greg Sterling:
Ask Maps as a user experience is much more likely to take over for local search than SGE. We’ll see you all next week