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FTC decides to take no action against Yelp

(Social Media) FTC investigation found no information to confirm allegations that Yelp has manipulated reviews to give preferential placement to advertisers.

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Yelp and the feds

An investigation by the Federal Trade Commission (FTC) was launched in early 2014 after 2,045 complaints were filed again Yelp. The complaints alleged Yelp manipulated their reviews so their advertisers were given higher ratings than their competitors. Yesterday, Yelp announced on their blog that the FTC has closed their investigation and decided against taking any action.

The Yelp blog states that the FTC conducted a “deep inquiry into [their] business practices and informed [them] that it will not be taking any action against Yelp. The FTC looked into [their] recommendation software…and after nearly a year of scrutiny, the FTC decided to close its investigation.”

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When the FTC looked at Yelp’s recommendation software, they also investigated what they said to other businesses about the software, what their salespeople say about the advertising programs, and how Yelp ensures that their employees are unable to manipulate the ratings and reviews that are displayed online. In short, they tried to look at the possibility the ratings were manipulated from all sides. Yelp also states the Harvard School of Business conducted and independent study which found that Yelp’s recommendation software “does not treat advertisers’ reviews in a manner different to non-advertisers’ reviews.”

The legal investigation does not stop there, however

A few businesses filed claims in court, alleging Yelp played favorites with advertisers, but none of the cases have been successful. The Ninth Circuit Court of Appeals ruled that the plaintiffs “lacked facts” necessary to back up their claims. Many of the original complaints “appeared to be from businesses that simply weren’t happy with their rating or reviews on Yelp.”

This is the second FTC investigation into Yelp’s practices; the first investigation was closed without any action as well. It seems, for now, Yelp is doing what it say it is doing. However, keep in mind, a federal appeals court ruled in September that even if Yelp was doing what the allegations claim and giving preferential placement to businesses that purchase ads on the platform, this would not be against the law.

Bottom line: as with most things on the Internet, do your own research; question the veracity, but use what is available as a guide post.

Jennifer Walpole is a Senior Staff Writer at The American Genius and holds a Master's degree in English from the University of Oklahoma. She is a science fiction fanatic and enjoys writing way more than she should. She dreams of being a screenwriter and seeing her work on the big screen in Hollywood one day.

Social Media

Twitter to start charging users? Here’s what you need to know

(SOCIAL MEDIA) Social media is trending toward the subscription based model, especially as the pandemic pushes ad revenue down. What does this mean for Twitter users?

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Twitter and other social media apps open on a phone being held in a hand. Will they go to a paid option subscription model?

In an attempt to become less dependent on advertising, Twitter Inc. announced that it will be considering developing a subscription product, as well as other paid options. Here’s the scoop:

  • The ideas for paid Twitter that are being tossed around include tipping creators, the ability to pay users you follow for exclusive content, charging for use of the TweetDeck, features like “undo send”, and profile customization options and more.
  • While Twitter has thought about moving towards paid for years, the pandemic has pushed them to do it – plus activist investors want to see accelerated growth.
  • The majority of Twitter’s revenue comes from targeted ads, though Twitter’s ad market is significantly smaller than Facebook and other competitors.
  • The platform’s user base in the U.S. is its most valuable market, and that market is plateauing – essentially, Twitter can’t depend on new American users joining to make money anymore.
  • The company tried user “tips” in the past with its live video service Periscope (RIP), which has now become a popular business model for other companies – and which we will most likely see again with paid Twitter.
  • And yes, they will ALWAYS take a cut of any money being poured into the app, no matter who it’s intended for.

This announcement comes at a time where other social media platforms, such as TikTok and Clubhouse, are also moving towards paid options.

My hot take: Is it important – especially during a pandemic – to make sure that creators are receiving fair compensation for the content that we as users consume? Yes, 100%. Pay people for their work. And in the realm of social media, pictures, memes, and opinions are in fact work. Don’t get it twisted.

Does this shift also symbolize a deviation from the unpaid, egalitarian social media that we’ve all learned to use, consume, and love over the last decade? It sure does.

My irritation stems not from the fact that creators will probably see more return on their work in the future. Or on the principal of free social media for all. It stems from sheer greediness of the social media giants. Facebook, Twitter, and their counterparts are already filthy rich. Like, dumb rich. And guess what: Even though Twitter has been free so far, it’s creators and users alike that have been generating wealth for the company.

So why do they want even more now?

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TikTok enters the e-commerce space, ready to compete with Zuckerberg?

(SOCIAL MEDIA) Setting up social media for e-commerce isn’t an uncommon practice, but for TikTok this means the next step competing with Facebook and Instagram.

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Couple taking video with mobile phone, prepared for e-commerce.

Adding e-commerce offerings to social media platforms isn’t anything new. However, TikTok, which is owned by the Chinese firm ByteDance, is rolling out some new e-commerce features that will place the social video app in direct competition with Mark Zuckerberg’s Facebook and Instagram.

According to a Financial Times report, TikTok’s new features will allow the platform to create and expand its e-commerce service in the U.S. The new features will allow TikTok’s popular users to monetize their content. These users will be able to promote and sell products by sharing product links in their content. In return, TikTok will profit from the sales by earning a commission.

Among the features included is “live-streamed” shopping. In this mobile phone shopping channel, users can purchase products by tapping on products during a user’s live demo. Also, TikTok plans on releasing a feature that will allow brands to display their product catalogs.

Currently, Facebook has expanded into the e-commerce space through its Facebook Marketplace. In May 2020, it launched Facebook Shops that allows businesses to turn their Facebook and Instagram stories into online stores.

But, Facebook hasn’t had too much luck in keeping up with the video platform in other areas. In 2018, the social media giant launched Lasso, its short-form video app. But the company’s TikTok clone didn’t last too long. Last year, Facebook said bye-bye to Lasso and shut it down.

Instagram is trying to compete with TikTok by launching Instagram Reels. This feature allows users to share short videos just like TikTok, but the future of Reels isn’t set in stone yet. By the looks of it, videos on Reels are mainly reposts of video content posted on TikTok.

There is no word on when the features will roll out to influencers on TikTok, but according to the Financial Times report, the social media app’s new features have already been viewed by some people.

TikTok has a large audience that continues to grow. By providing monetization tools in its platform, TikTok believes its new tools will put it ahead of Facebook in the e-commerce game, and help maintain that audience.

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Social Media

Your favorite Clubhouse creators can now ask for your financial support

(SOCIAL MEDIA) Clubhouse just secured new funding – what it means for creators and users of the latest quarantine-based social media darling.

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Woman talking on Clubhouse on her iPhone with a big smile.

Clubhouse – the live-voice chat app that has been taking the quarantined world by storm – has recently announced that it has raised new funding in a Series B round, led by Andreessen Horowitz, the venture capital firm in Silicon Valley.

The app confirms that new funding means compensation for creators; much like the influencers on TikTok and YouTube, now Clubhouse creators will be able to utilize features such as subscriptions, tipping, and ticket sales to monetize their content.

To encourage emerging Clubhouse creators and invite new voices, funding round will also support a promising “Creator Grant Program”.

On the surface, Clubhouse is undoubtedly cool. The invite-only, celebrity-filled niche chatrooms feel utopic for any opinionated individual – or anyone that just likes to listen. At its best, Clubhouse brings to mind collaborative campfire chats, heated lecture-hall debates or informative PD sessions. I’ll be the first to admit, I’m actually obsessed.

And now with its new round, the video chatroom app will not only appear cool but also act as a helpful steppingstone to popular and emerging creators alike. “Creators are the lifeblood of Clubhouse,” said Paul & Rohan, the app’s creators, “and we want to make sure that all of the amazing people who host conversations for others are getting recognized for their contributions.”

Helping creators get paid for their labor in 2021 is a cause that we should 100% get behind, especially if we’re consuming their content.

Over the next few months, Clubhouse will be prototyping their tipping, tickets and subscriptions – think a system akin to Patreon, but built directly into the app.

A feature unique to the app – tickets – will offer individuals and organizations the chance to hold formal discussions and events while charging an admission. Elite Clubhouse rooms? I wonder if I can get a Clubhouse press pass.

Additionally, Clubhouse has announced plans for Android development (the app has only been available to Apple users so far). They are also working on moderation policies after a recent controversial chat sparked uproar. To date, the app has been relying heavily on community moderation, the power of which I’ve witnessed countless times whilst in rooms.

So: Is the golden age of Clubhouse – only possible for a short period while everyone was stuck at home and before the app gained real mainstream traction – now over? Or will this new round of funding and subsequent development give the app a new beginning?

For now, I think it’s safe to say that the culture of Clubhouse will certainly be changing – what we don’t know is if the changes will make this cream-of-the-crop app even better, or if it’ll join the ranks of Instagram, Twitter, and Facebook in being another big-time social media staple.

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