Nineteen firms have been fined by New York authorities after writing fake reviews on websites such as Yelp, Google Local and CitySearch.
They will pay a total of $350,000 (£218,470) in penalties.
The local attorney general's office set up a fake yogurt shop in Brooklyn and sought help from firms offering search engine optimisation (SEO) services to help boost its online presence.
But some SEO firms also offered to post fake reviews of the yogurt shop online.
They created online profiles and then paid for reviews from freelance writers, some from places as far away as the Philippines and Bangladesh, as well as countries in eastern Europe.
In addition, the investigation found that many businesses were producing their own fake online reviews from among staff, to boost their reputations.
The attorney general's office said Operation Clean Turf had been "a year-long undercover investigation into the reputation management industry, the manipulation of consumer-review websites", and into what it called "the practice of astroturfing".
"Astroturfing" refers to the practice of creating fake grass root reviews.
"By producing fake reviews, these companies violated multiple state laws against false advertising and engaged in illegal and deceptive business practices," the attorney general's office said.
Among firms - in addition to numerous SEO companies - which have given assurances they will now stop posting fake reviews, are a wig emporium, dental, massage and beauty outlets, a nightclub, a laser-hair removal firm and a bus company.