Consumer review website Trustpilot has seen its shares nosedive after allegations surfaced comparing it to a "mafia-style extortion racket".
Analysis from Grizzly Research likened Trustpilot's business model to that of the mafia, suggesting it effectively coerces businesses into signing up for membership, The Times reports.
It does this, the research says, by “creating unsolicited review profiles … with the intention to attract hyper-negative reviews and force these businesses into paying subscription deals to more actively manage the reviews”.
A 26-page report stated: “We believe that the public will increasingly wake up to the fact that Trustpilot has traded the integrity of reviews for revenues. We see this resulting in a rapid depreciation of the Trustpilot brand and its fundamental value proposition.”
The report claims to have found evidence of companies that pay for Trustpilot membership seeing their scores "magically lift from under 2 of 5 stars to over 4 of 5 stars”, while genuine negative reviews of its premium members were “spuriously challenged or removed”.
It also said it identified a “concerning pattern of apparently falsified reviews” for non-paying businesses and suggested industry experts refer to the scheme as the "Trustpilot mafia", alleging it engages is “bullying tactics reminiscent of a bad 1990s mob movie”.
Shortly after the report was published, Trustpilot released a response saying: "The report presents a series of claims that are selective, misleading and framed to support a predetermined narrative.
"It omits key context and publicly available facts, creating a false impression and exhibits a lack of understanding of how Trustpilot works. Trust is our guiding principle and is central to everything we do."
Despite the reply, Trustpilot's share price fell more than 30% in the space of a day.
FTSE100
The UK's flagship share index, the FTSE 100, was up 46 points at 9,735 shortly after opening this morning.
Brent crude oil futures were up 0.03% at $63.31 a barrel.
Companies reporting:
No FTSE 350 reporters