About 19 firms, including Yelp and CitySearch, have been fined $350,000 by New York after getting caught generating fake online reviews for businesses.
The New York Attorney General Eric Schneiderman set up a fake yogurt shop in Brooklyn, New York and sought help from these companies to place fake reviews on sites like Citysearch, Google, Yahoo and Yelp.
As part of efforts to round up the issue, an undercover operation dubbed 'Operation Clean Turf' was executed, which revealed that the firms were paid by local organisations to flood the Internet with comments on sites such as Yelp, Google Local and CitySearch.
During the course of the probe, several firms were caught concealing their identities, including creation of fake online profiles on consumer review websites and paying freelance writers from Philippines, Bangladesh and Eastern Europe from $1 to $10 per review.
Schneiderman said that consumers rely on reviews from their peers to make daily purchasing decisions on anything from food and clothing to recreation and sightseeing.
"This investigation into large-scale, intentional deceit across the Internet tells us that we should approach online reviews with caution," Schneiderman said.
"And companies that continue to engage in these practises should take note: "Astroturfing" is the 21st century's version of false advertising, and prosecutors have many tools at their disposal to put an end to it."
Schneiderman's office also revealed that the bogus reviews violated laws against fake advertising and misleading business practises.
Yelp Senior Litigation Counsel Aaron Schur said that over 100 million visitors come to Yelp each month, making it critical that Yelp protect the integrity of its content.
"We take many steps to do this, including the use of automated filtering software, leveraging our vast user community for tips about suspicious content, undercover sting operations, legal action, and cooperation with law enforcement," Schur said.