If you insert a product name or a term into the Search box on amazon.com, what comes up and in what order is determined by algorithms that Amazon says are based on popularity of the products. The higher a seller appears on the list that emerges in a search, the more the sales. Knowing that part of the analytics, sellers are gaming the system. Amazon's system is automated, so sellers are able to improve their ranked appearances by ginning up volume. Here is a list of the tactics sellers employ:
- There are consultants who approach sellers and offer to help improve their rankings -- some sellers sign up, not really understanding what such consulting firms will do. The consultants charge, on average, $1.29-$5.42 for positive reviews. To avoid detection, the consultants limit the number of positive reviews that they will do each month so as not to trigger Amazon detection devices.
- Some sellers use a form of insider trading -- they pay Amazon employees for information about their competitors.
- Other sellers provide negative feedback on their competitors so that buyers read the reviews and turn to a different seller on the search list. For example, if a review includes a safety concern, Amazon may suspend sales of the products.
- Some sellers hire employees whose job it is to order and return and then provide negative feedback.
- Some sellers ship empty boxes to fake buyers so that there is a real tracking number and the fake buyers (accomplices) then post positive reviews.
- Some sellers go in and switch out reviews and products. A review of some products on Amazon found that some of the positive reviews were not even related to the listed product, but the reviews were inserted to fool the Amazon algorithm that tracks positive reviews.
- Then there are the bots, and they are put to good use in order to pump up feedback and sales.
- Click farms that push up the number of clicks sellers receive
Laura Stevens and Jon Emot, "Scams, Clicks, & Dirty Tricks, Wall Street Journal, July 28-29, 2018, p.... The human mind is full of unlimited possibilities and with 550 million products on Amazon, the task of keeping up with abuses in all their forms is a tall order for Amazon.
Amazon has the right to refuse to carry the products of sellers who engage in the above behaviors. When Amazon suspends sellers, the sellers have the right to appeal. However, the sellers are suspended during the period of the investigation, generally a time period of one week, which is a significant time period for sales.
The interesting legal questions are whether buyers would have a remedy because of the representations made on the products that they used and believed prior to making the purchase. Is it misrepresentation by the seller if the seller has hired someone else to do marketing? What if the sellers did not know about the types of tactics used? Reliance on reviews is typical in e-commerce, but the sellers, in most cases, are not writing the reviews themselves.
The abuse is extensive. The number of reports has spiked, and Adobe believes that 23% of the activity on the web indicates non-human involvement in what is being posted. However, consumers have proved to be fairly savvy -- they tend to shy away from the products with glowing reviews because they have been burned by fake product reviews in the past.
Human discernment may be a good fix for the robotic activities and algorithm inaccuracies.
DISCUSSION STARTERS
Explain the processes used to foil the algorithms.
Discuss the legal remedies consumer and Amazon have.
