Amazon's removal of Aukey, RAVPower and other brands is 'only the beginning'

Amazon's removal of Aukey, RAVPower and other brands is 'merely the offset'

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Imitation reviews take been a problem on Amazon for years. And there accept been enough of articles written online (including this one from ThePennyHoarder ) detailing how users can get paid to write reviews on Amazon. But Amazon updated its customer reviews policy in 2016 prohibiting any sort of incentivized review. That includes anything from free products to gift cards.

And then why are so many brands getting kicked of Amazon recently? It seems that the likes of Aukey, Mpow, Tomtop and the Sunvalley Group, the parent company for RAVPower, Taotronics and VAVA, never got the memo.

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In May Aukey and Mpow were delisted from the Amazon marketplace following a report by SafetyDetectives. The site uncovered a network of third-party companies that would solicit actual Amazon customers to buy products and leave a positive review. Later on the review was posted, the user would exist refunded the purchase cost via PayPal, effectively getting the product for free.

It was a clever system that worked around Amazon, using other services to communicate with buyers and get them paid.

It's why Amazon is now asking social media companies to upwards efforts in spotting "bad actors" that offer incentives for favorable reviews.

Earlier this month, Nicole Nguyen of the Wall Street Periodical reported that RAVPower, makers of portable bombardment banks, headphones and other electronic devices, were offering gift cards in exchange for reviews. In fact, Nguyen had bought a charging brick off Amazon and found a gift card offer inside.

Subsequently Nguyen's report, and Amazon's subsequent delisting of RAVPower, Taotronics and VAVA, the Sunvalley Group's revenues dropped 31% and its stock had fallen 12%.

RAVPower'due south parent company has issued a statement maxim that 3 of its brands (incl. Taotronics and VAVA) were suspended from Amz yesterday, affecting 31% of the company'southward revenue, and information technology will rely on its DTC site. The stock is down 12% today. https://t.co/6hKeLiyvgmJune 17, 2021

Still, all of these brands were some of Amazon's peak sellers. Some believe that artificial reviews have been an open underground at the e-commerce giant for a while, and that it wasn't until regulatory force per unit area by the FTC did the visitor begin acting. Voice's Recode actually acquired some internal messaging and found that for some of its largest sellers, the company essentially let bad practices slide.

"Communications betwixt Amazon employees viewed by Recode also appear to expose an inconsistent punishment organisation in which employees need special approval for suspending certain sellers because of their sales numbers, while some merchants are able to keep selling products to Amazon customers despite multiple policy violations and warnings."

Gaming the system

Given that 89% of consumers are probable to buy at Amazon over other online sites, in that location's a lot of money to exist had when landing on the offset search page. Like Apple, Amazon occupies a very small club of $1 trillion dollar companies. Considering that Amazon has over 12 meg products on its market place, landing at the peak of search results can mean tremendous sales.

Amazon'due south algorithm works to push the all-time products in front of consumers. And a great way to gauge if a product is good are five-star ratings.

"In early 2012, the Amazon catalog grew too big, and the only fashion to get to the top of search results was to evidence to the algorithm that your production was the all-time," said chief executive of Marketplace Pulse Juozas Kaziukėnas in an interview with the Wall Street Journal back in 2018. "Most sellers realized acquiring reviews was a aureate ticket."

Given the deluge of products, it's non besides surprising that sellers started looking to other means to pump up v-star ratings.

Co-ordinate to Saoud Khalifah, CEO of Fakespot, a browser extension and app that points out fake reviews, of the companies mentioned above, a huge per centum of reviews were either fake or coerced.

"The average Fakespot form for these companies is a C course for thousands of listings," said Khalifah in an interview with Tom'southward Guide. "The average percentage of simulated reviews on the listings would range from 20% to lxx% in some instances."

Pressure mounts from FTC

Another dynamic throughout all of this is the contempo appointment of Lina Khan, an acquaintance police force professor at Columbia Law School with expertise in antitrust and competition, as chairperson to the FTC.

"The new appointment of Lina Khan volition only increase the pressure on Amazon to combat the rampant fraud on their platform. The problem isn't only with fake reviews. There are likewise fake upvotes, counterfeits, misleading information and many more issues that Fakespot detects," said Khalifah.

Nosotros reached out to Amazon for comment, and the online retailer says information technology has upped it game on weeding out fake reviews.

"Amazon relentlessly innovates to allow merely genuine product reviews in our shop to aid earn the trust of customers,'' said an Amazon spokesperson in an email to Tom's Guide. "In 2020, we stopped more than 200 million suspected fake reviews before they were e'er seen past a customer, and more than 99% of reviews enforcement was driven by our proactive detection."

A reckoning is coming

Lina Khan, nominee for Commissioner of the Federal Trade Commission (FTC), arrives at at a Senate Committee on Commerce, Science, and Transportation confirmation hearing on Capitol Hill on April 21, 2021 in Washington, DC. — (Image credit: Saul Loeb-Puddle/Getty Images)

While faux reviews have been a trouble on Amazon for a few years at present, co-ordinate to Khalifah, in 2020 and 2021 false reviews had reached an all-fourth dimension high on Amazon internationally.

Still with Aukey, RAVPower and others now delisted, that leaves a massive gap in electronics sales at Amazon. At the moment, it'south uncertain if Amazon will allow these sellers to render.

"No clue who fills the void, but likely each departed make's sales will be divide amidst the other brands in the same product category," said Michael Pachter, a inquiry annotator at Wedbush Securities, in an interview with Tom'southward Guide. "At that place is no reason to conclude that Amazon'south commodity brands will benefit in a disproportionate manner."

While Pachter and regulators agree that ultimately removing brands that post incentivized reviews volition exist good for the consumer, at that place's still a long fashion to become for Amazon to purge this practice from its marketplace. For Khalifah, whose unabridged company is centered effectually finding and spotting fake reviews, he feels a real reckoning has withal to come up.

"This is only the beginning. Backside the Aukey's and Mpow's of the world, there are hundreds of other unscrupulous sellers that have been engaged in the same or similar deceptive tactics since mean solar day-i of selling on Amazon."

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Imad Khan is news editor at Tom's Guide, helping directly the day'due south breaking coverage. Prior to working at the site, Imad was a full-time freelancer, with bylines at the New York Times, the Washington Post and ESPN. Outside of piece of work, you can find him sitting blankly in forepart of a Word certificate trying desperately to write the first pages of a new book.