Amazon has announced it has filed suit against the administrators of roughly 10,000 facebook groups which it claims are behind fake review scams on the retailer’s website. Amazon is hoping to crack down on fake reviews on its website to both protect its customers and preserve its company’s reputation.
Amazon has declined to include Facebook parent company Meta in the lawsuit, because under Section 230 of the Communications Decency Act, internet companies like Facebook which host third party content are released from liability for that content.
Amazon says it has reported about 10,000 fake review groups to Meta, and that roughly half of those have been taken down and the other half is under investigation by the Facebook parent.
The fake review groups are designed to facilitate the sale of fake reviews by brokers, to Amazon sellers, who will then see their listings rise to the top of Amazon search results. Amazon says it is targeting fake review brokers who post reviews on Amazon stores in the U.S., U.K., Germany, France, Italy, Spain, and Japan. The products involved range from tripods to car stereos. One Facebook group devoted to fake reviews had as many as 43,000 members.
University of Illinois, Chicago computer science professor Bing Liu explained how desirable the reviews are, and why the business is so lucrative for both brokers and sellers. “The retailers obviously want reviews. I mean whether it’s fake, or not fake, they want reviews.”
The brokers who run the groups act as the linkage between sellers, who pay for the fake reviews, and the members of their groups, who agree to take a payment to purchase the product and then post a glowing review of it.
Amazon sees the fake reviews as a threat to their premium business model. When a seller of an inferior product purchases glowing 5-star reviews, and customers of Amazon then use those reviews to select a product, only to find it is in fact inferior, that impacts the trust between Amazon and their customers. That can affect everything from follow-on purchases that are diverted to competitors like Walmart, to Amazon Prime membership numbers.
Amazon has said it employs 12,000 employees who are specifically assigned to identify fake reviews and take them down, and that it has removed more than 200 million fake reviews. However the battle continues.
Liu said, “It’s basically a tug of war. It’s sort of an arms race. You have algorithms to catch people doing something and then they find something else to evade your algorithm.”
Amazon’s opening legal salvo against fake reviews has been launched just as sales have begun to pull back from their pandemic highs. When everyone was locked down, Amazon was a go-to retailer to have purchased goods delivered to people’s homes, without the risk of having to shop in a store and be exposed to other people.
However since then, net sales in Q1 of 2022 rose only 7%, compared to the stunning 44% rise in net sales seen in Q1 of 2021. Amazon stock has dropped 29% year to date.
