Source Image: Amazon.com
Amazon pushes back against fake reviews by suing sellers
Through a special arrangement, what follows is a summary of an article from Retail Dive, an e-newsletter and website providing a 60-second bird’s eye view of the latest retail news and trends.
Amazon took another step to purge fake reviews from its site last week by suing three sellers for using false accounts to post positive reviews about their products.
According to TechCrunch, Amazon is looking to permanently ban the defendants in the suit from buying and selling on its website, and is also seeking all the profits the sellers made on Amazon, attorneys’ fees and damages exceeding $25,000. This is the first time Amazon has sued sellers on its marketplace.
In the past the e-commerce giant has sued the companies that sell fake reviews, not those who buy them. The retailer has sued more than 1,000 parties that provide these false reviews since 2015 and last June installed a machine-learning reviews system that favors verified users on its site.
The three cases against sellers filed with the American Arbitration Association target merchants that use “sock puppets” to provide overwhelmingly positive reviews on their products.
“Our goal is to eliminate the incentives for sellers to engage in review abuse and shut down this ecosystem around fraudulent reviews in exchange for compensation. Lawsuits are only one piece of the puzzle,” Amazon said in a statement provided to media outlets.
Amazon is stepping up its game for good reason: Many customers use online reviews when evaluating a purchase, with 95 percent saying they have consulted reviews in the past, according to research from PowerReviews. Only price beats reviews as the most important consideration when a customer is contemplating a purchase, above free shipping, product brand, and even recommendations from family and friends.
An Amazon spokesperson told TechCrunch that these methods are largely working, saying the “vast majority” of reviews on the site are authentic.
Discussion Questions
DISCUSSION QUESTIONS: Do you see any risks to Amazon suing and banning sellers for fake reviews? Are public lawsuits a good way for Amazon to instill confidence in consumers that the company is able to manage its fake review problem?
Poll
BrainTrust
Dick Seesel
Principal, Retailing In Focus LLC
Peter Charness
Retail Strategy - UST Global
Other panelists may disagree, but I see little downside to Amazon protecting its reputational integrity. The risk of doing nothing to prevent fraudulent reviews is far greater than the cost (in time and money) of litigation. I assume that Amazon has agreements in place with all second-party sellers on its site to prevent fraudulent reviews, but the policy is only as good as the policing.
I see the legal approach as short term for Amazon because of its use of machine learning technology. I would expect the next iteration of this tech to go beyond validating individual reviews and move to auto-generated summaries. By that I mean the “machine” can “read” all the validated reviews on a product, and generate (without human writers) summary text along the lines of: “The top ten reasons reviewers cite as the best uses of this product are … and, the top ten needs reviewers suggest you consider another product for your use are….”
If buyers cannot trust the reviews then by extension, they can’t trust Amazon. This is a definite case for brand protection.
There’s little risk involved for Amazon to aggressively go after buyers and sellers of fake reviews. Amazon pioneered the use of product reviews to educate shoppers and it’s paramount that they keep this information pure and free from corruption. By dealing firmly with anyone who abuses the system, Amazon can maintain the viability of reviews as an important channel for shopper information-gathering.
Buyers want to trust consumer reviews. Ensuring that reviews are from legitimate consumers of the product ensures the integrity of reviews for whatever company does the enforcing. That is good protection of credibility.
Amazon should absolutely protect the integrity of the reviews, including “certified purchaser” notations. As to the damages that they are asking for … “interesting.”
This is all about retention of shopper trust. Amazon has little downside risk in being aggressive about preventing fake reviews. In fact, all e-commerce operators should be thankful that this action is being funded by Amazon, as it has benefits for all in the online universe.
I don’t see a risk for Amazon … and see it as another smart way for Amazon to illustrate its commitment to consumers. Very good branding for Amazon to be working hard to ensure the reliability of the information it presents to its customers.
I believe a crisis of confidence in reviews is imminent. It’s not just fake reviews. It’s also the thousands of review clubs and review programs offering product for free or at a discount for “unbiased” reviews. This is never the same as authentic reviews for a product a shopper wanted, sought out, and purchased at full price. Given how dependent shoppers are on reviews, the realization that so many are not as “genuine” as they once believed creates lack of trust in the rating.
Amazon would do well to continue to pursue means of ensuring reviews are from buyers motivated by a real need, rather than a program. Note: they started this with Amazon Vine. They need to reconsider whether that is still a good strategy/program. I would argue it is not.
Amazon, like any other retailer, has to diligently grow and protect their brand. That may entail a cease & desist, a lawsuit, or other form of action. Their brand has moved beyond mere e-commerce. And, as a firm now sporting the sixth highest publicly traded stock, they have an obligation to protect the intellectual value of their firm — for the sake of all stakeholders — customers, employees, vendors, and shareholders.
Alibaba was hit with so many “fakes” — real or otherwise — in China, that they had to even create a separate entity in TMall.
Amazon is taking the right position on the issue. They will instill confidence for their customers.
Amazon has every right to protect its reputation and success from false reviews. We, as individuals, have the right. Corporations should have the same rights. Reputation means a lot to the success of a company. Protect it.
Amazon has reshaped how e-commerce works with its commitment to a broad array of choices, competitive prices, and high quality of service. As such, the performance of its third-party sellers it critical — if they fall below the quality of service that Amazon requires, that could ultimately hurt Amazon’s brand. Therefore, Amazon takes great care to monitor the performance of its sellers. Part of that monitoring is ensuring the integrity of sellers.
This is an important lesson for anyone selling online today, especially given that more and more companies use the Marketplace model – allowing third-party partners to sell on their sites. An April 2016 Forrester report “Retailers Must Seize The Marketplace Opportunity” points out that “Building trust is a central part of marketplaces. User-generated content, such as product reviews, influences shopper buying decisions. This visibility into product and seller performance builds consumers’ trust in a seller, even if the seller is unfamiliar to them.”
The report points out that almost 70% of consumer will only buy a product if ratings and reviews are present. Marketplace operators must architect their platforms to allow ratings and reviews and to take actions based on the business intelligence that comes from analyzing those ratings. Operators can promote high-performance sellers and remove low-performing sellers to continually improve the quality of service and, thus, the overall customer experience.