Plagued by False Reviews and Counterfeit Listings: Amazon Fights Back

Kohrman Jackson & Krantz LLP
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From its inception, Amazon has been at war with unscrupulous actors, both foreign and domestic, who seek to gain a competitive advantage through any means necessary. What began as malware, viruses, and spam, has evolved into selling counterfeit goods and purchasing and promoting illegitimate positive reviews and defamatory false reviews.

AMAZON POLICIES ON TRACK TO MAKE A POSITIVE IMPACT

In response, Amazon has implemented a number of policies that are designed to prevent sellers from:

  • Selling unlawful, counterfeit, pirated, or stolen goods
  • Selling goods in an unlawful or unethical manner
  • Violating the proprietary rights of others
  • Otherwise violating Amazon’s policies

Amazon believes that one program, implemented last year, makes it harder to register for fake accounts by requiring a one-on-one conversation with an Amazon team member to verify a prospective seller’s identity. On June 8, Amazon reported that these policies and processes had made a positive impact.

In its second annual report, Amazon reported in 2021 alone, its policies and algorithms prevented 4 billion counterfeit listings from being posted; the report also stated that they had identified and removed more than 3 million fake products from its eCommerce website. These very same policies and algorithms also prevented more than 2.5 million attempts to create fake accounts on Amazon’s third-party marketplace – the platform third-party sellers use to sell products directly to consumers on Amazon.

Amazon also reported spending more than $900 million to fight fraud and sued – or caused to be investigated – more than 600 sellers in the U.S. and abroad. In addition, Amazon reported suspending over 50,000 merchants in 2021 for violating Amazon’s policies against posting false product reviews. These merchants engaged in a pattern of soliciting and paying individuals – who had no personal experience with the products being reviewed – to post positive reviews of the merchant’s products and negative reviews of the merchant’s competitors’ products. These illegal schemes have proven to be highly effective short-term sales tactics that have long-term and harmful consequences to consumers, honest sellers, and Amazon’s reputation.

NEW LEGISLATION AIMED AT ONLINE RETAILERS

In addition to these controls and efforts, Amazon is supporting recent legislative efforts, including the INFORM Act, which is a bill introduced by the House that is aimed at online retailers. If enacted, this bill would require online marketplaces, such as Amazon, to collect contact and financial information from high-volume sellers, some of which would be shared with consumers.

If recent history is any indicator of the future, Amazon and the legitimate sellers who rely on Amazon for their business to flourish will be engaged in a long, drawn-out war, with unscrupulous actors who try to get ahead by bending and breaking the rules. 

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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