According to Amazon’s 2020 Brand Protection Report issued earlier in May, over 5 billion changes to product detail pages were scanned in an attempt to weed out suspected counterfeiters and unverified claims, resulting in the seizure of over 2 million pirated items. And while fraud and counterfeiting continue to be a pervasive concern throughout digital retail, Amazon is one of the few platforms addressing what is now estimated to be at least a $1.5 Billion threat in the US during 2020 alone.
But counterfeits aren’t the only threat to Amazon’s reputation. WIth 95 percent of all online shoppers using reviews as a considerable guideline in their purchasing decisions, social proof can ultimately launch or destroy a brand overnight. And while Amazon has maintained long running and detailed policies against incentivized reviews, resulting in thousands of highly public lawsuits over the past six years, it hasn’t deterred even Amazon-exclusive brands from attempting to manipulate the review system.
Including brands collectively estimated at over $1 Billion in sales on the platform.
The Overseas Market and Review Manipulation on Amazon
In April 2021, Amazon suspended fourteen different brands originating in China for taking part in a review manipulation scheme aiming to reward participants through financial incentives and products by leaving five star reviews. While this scheme is hardly new, what makes Amazon’s mass reinforcement of review guidelines noteworthy is the fact that these brands aren’t necessarily low profile entities. They were by and large well known to the Amazon community because they were designed and created to be sold specifically on Amazon itself, including Mpow, Aukey and Seneo—all hoping to emulate the success of Anker, an Amazon-native brand who began their start as a third-party seller on the platform in 2011 only to go public last year with an initial offering of $10.30 a share.
Included in the suspension were over a dozen third-party sellers also originating in China, a market now estimated to represent 75 percent of new sellers on Amazon in 2021. While the Chinese eCommerce market is the largest global adopter of digital trade with a total retail share predicted to be over 50 percent in 2021, fierce competition has forced many sellers to adapt to internationally based platforms.
But the Chinese digital market has been notoriously lax in enforcing regulations against online fraud. Subsequently, sellers have had to utilize black hat tactics in order to survive regulatory enforcement in new markets. Chief among these tactics are product review networks readily found on social media, where participants can access IP proxies, overseas accounts and virtual payment processes for a nominal fee—an underground economy whose sole purpose is based on one principle: defeating Amazon’s fraud detection algorithms.
Amazon’s Fight Against Review Manipulation
A landmark 2020 case in Utah District Court ordered an Oregon-based dietary supplement manufacturer to pay some $9.5 million to a competitive reseller after it was found they committed deceptive advertising fraud by manipulating testimonials on Amazon to inflate the number of positive and unverified reviews. But the Utah case isn’t the first of its kind. As early as 2015, Amazon has filed lawsuits against alleged review manipulators, culminating in a historic Federal Trade Commission case in 2019 challenging a marketer’s use of fraudulent paid reviews on Amazon—the first federal agency case to implicate fake reviews as a form of deceptive advertising.
New sellers may chafe at restrictions designed by Amazon to verify seller identity. But every day, those restrictions are becoming more of an outright necessity, not an exception. Amazon has recently been found liable for defective products sold by third-party sellers; and there’s little room for doubt that their recent development of a Counterfeit Crimes Unit was the result of increasing federal pressure on Amazon to combat the threat of fraud and piracy in Amazon’s international marketplaces. But there’s a larger factor at stake than protecting Amazon from litigation.
Amazon has built their reputation on customer focus. And anything that diminishes the objectivity of customer insights will impact that reputation. With over half of US consumers beginning their product searches on Amazon, the need to maintain integrity and honesty in social proof is critical in 2021 and beyond. Misinformation runs rampant throughout digital media. And if Amazon can play even the smallest role in staunching outright manipulation, they’ve taken one small step for consumers. But a giant step towards fairness and honesty in the digital world.
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