The third-party seller marketplace has exploded over recent years, as sales have risen by over 900% from what they were back in 2014. In fact, in 2022, Amazon’s largest revenue segment was online retail product sales with roughly 220 billion U.S. dollars in global net sales, while retail third-party seller services ranked second with nearly 118 billion U.S. dollars in sales.
The Rise of Fake Reviews
This expansion has fostered tremendous competition which has, in turn, spawned an entire industry of brokers who operate on the dark web, communicate through encrypted messages, and offer a host of “black hat services” which are designed to manipulate the unsuspecting consumer to buy a particular product from a particular seller. The following table, which was published by CNBC, depicts just some of the manipulative services offered by these brokers:
In an effort to protect consumer confidence, Amazon has banned users from posting false reviews on its platform by enacting an “Anti-Manipulation Policy for Customer Reviews.” In this policy, Amazon warns of the severe consequences for those who try to manipulate the market by posting false reviews:
If we determine that you have attempted to manipulate reviews or violated our guidelines in any other manner, we may immediately suspend or terminate your Amazon privileges, remove reviews, and delist related products. In addition, if we determine that an Amazon account has been used to engage in review manipulation, remittances and payments may be withheld or forfeited. Misconduct may also violate state and federal laws, including the Federal Trade Commission Act, and can lead to legal action and civil and criminal penalties.
We pursue lawsuits for reviews manipulation against dishonest sellers and manufacturers who attempt to purchase fraudulent reviews and the parties who provide and post those reviews. These lawsuits have produced monetary judgments exceeding the annual revenue for such sellers and data allowing us to take additional enforcement actions against others. We suspend and ban the accounts of others who engage in review abuse or otherwise violate our guidelines. We will continue to remove reviews that violate our policies and pursue the sellers and manufacturers who create the demand for fraudulent reviews and the individuals and organizations who supply fraudulent reviews through all available means.
In 2022, Amazon removed 200 million fake reviews, and took legal action against 147 bad actors. Recently, two fake review brokers from China were sentenced to 2.5 years in prison for being paid to post false reviews, both positive and negative. Just this month, the final two U.S. based defendants who were involved in an illegal scheme of bribing Amazon employees, forging documents, and attacking competitors with fake reviews were sentenced to 18 months in federal prison.
Despite this, countless bad actors continue to offer illicit services connected to the online marketplace, which only harm companies who abide by Amazon’s policies and play by the rules. While Amazon has made tremendous strides, there is still work that needs to be done to restore and preserve the great deal of confidence the public places in the accuracy of Amazon’s customer reviews in making product purchasing decisions.
Protecting Your Brand
KJK’s eCommerce team has the experience, knowledge and resources to ensure your brand is protected from threats like unauthorized resellers, fake reviews, counterfeits and knockoffs that can destroy your reputation and cut into your profits. If you own or operate a business with an eCommerce presence and have questions about the services KJK’s eCommerce team offers, please reach out to Nathan F. Studeny (216.736.7284; NFS@kjk.com), Derek Hartman (216.736.7248; DPH@kjk.com), or one of KJK’s eCommerce attorneys.