FTC fines supplement maker $600k for 'review hijacking' Amazon listings

https://www.engadget.com/ftc-fines-supplement-maker-600000-for-review-hijacking-amazon-listings-210142185.html

by Stratoscope • 3 years ago

97 43 3 years ago

I clicked on the article, was hopeful this was the FTC targeting a Chinese counterfeit seller & review hijacker.. but it was not to be

warent• 3 years ago

FTC going after any/all scam is amazing news, not sure why it matters if they're Chinese

coding1232• 3 years ago

Most scams seem to be chinese, indian these days. If there is a precedent that we can stop such out of country scammers, then vast swaths of the "scamming market" go away overnight.

mouse_• 3 years ago

For reference, this would be equivalent to a 5 cent fine for a normal American citizen.

Nature's Bounty, owned by Nestle (with a market cap of roughly $339 billion; https://stockanalysis.com/stocks/nsrgy/market-cap/ ), has to pay $600k, or .00017%, for scamming consumers.

coding1232• 3 years ago

Which makes it kinda equivalent to a cop pulling you over and giving you a warning - which wastes probably a nickel in gas.

loeg2• 3 years ago

Normal Americans don't have a market cap (which implies a valuation of multiples of future earnings and trading of ownership of those earnings) so it's unclear how you're scaling this comparison.

explaininjs2• 3 years ago

You forget that the fine is paid by all shareholders chipping in to present a portion of their shares to the FTC in the form of a burnt offering.

yieldcrv• 3 years ago

let's see, if I was fined more I would see what one of the recent judicial appointments from the last 5 years thinks of the FTC's very charter.

I think this is the right amount to avoid that question.

costco• 3 years ago

Given that total FTC spending is only $400 million wouldn't it be pretty easy for a group of like minded businessmen to exhaust their litigation budget?

givemeethekeys• 3 years ago

Note to self: the returns on review highjacking far, far outweigh the costs.

zx8080• 3 years ago

Should this fine Amazon instead as the marketplace which allows this behaviour?

drstewart• 3 years ago

No, but we should arrest Telegram employees for any terrorist plots that are coordinated on their platform (and any other encrypted communication apps) for allowing that behavior

cycomanic• 3 years ago

There is a significant difference though. Amazon is not just providing a communication platform, they take a significant cut of the money being made here, so I would argue they are an associate to the fraught (let's not even talk about all the other ways that they are often part of the deal).

threatofrain• 3 years ago

There is no requirement that we create a sweeping policy which unites both Amazon and Telegram into the same regulatory conversation.

But you would have us think that if we're not willing to make the policy tradeoff of privacy for terrorism mitigation on Telegram, then we also ought not make the tradeoff of higher regulatory burden for consumer confidence in big marketplaces.

heavyset_go3• 3 years ago

If Telegram management were knowingly letting terrorists plot attacks on their platform, they should definitely be held accountable.

Similarly, if Amazon management were knowingly letting scammers scam innocent people on their platform, they should definitely be held accountable.

We're at a point where you can use free automation to tell if an Amazon listing has fake reviews, yet Amazon sits there with their thumbs up their asses as millions of people are harmed by blatant scams on their platform. You can even report obvious scams and Amazon does nothing about it.

LegitShady2• 3 years ago

amazon allowing people to do it should be called out.

josephcsible• 3 years ago

When you get caught committing fraud to help sell something, the fine should be 100% of the revenue earned from selling that thing for the whole time you were committing the fraud.

bboygravity• 3 years ago

If that was applied to the financial world, we wouldn't have had the 2008 recession and subsequent inflation.

LegitShady2• 3 years ago

when you get caught committing fraud for big dollars like that, people should go to jail. Personal culpability will be more of a deterrent than corporate liability. The people who made that decision should be facing jail time.

ktkoffroth• 3 years ago

por que no los dos?

parineum• 3 years ago

Personal culpability will be more of a deterrent than corporate liability. The people who made that decision should be facing jail time.

I'm not certain that this is not already the case. At the very least, it is the case for more serious crimes. It is, however, pretty difficult to prove.

potamic• 3 years ago

It doesn't work when investors can exit before the fraud is discovered

55555• 3 years ago

Is the FTC ignoring all the Chinese sellers who do so much worse because they know they won’t be able to collect a fine?

jszymborski• 3 years ago

I mean, they can go after amazon for facilitating it.

heavyset_go3• 3 years ago

I wish there was a way for them to go after Amazon for running a service with the intention of it being abused instead of hiding behind S230 and blaming users for the blatant scams they do nothing about even when they're reported to them.

altairprime2• 3 years ago

Reporting fraudulent reviews to the FTC, rather than to Amazon, would be an excellent step towards seeing that happen.

heavyset_go3• 3 years ago

I've actually been doing exactly that for more than 3 years[1].

Looking at that post, it is still the case 3+ years later that it is nearly impossible to report fraudulent listings and sellers to Amazon as a customer. It's literally easier to contact the FTC about it.

[1] https://news.ycombinator.com/item?id=22388067

BonoboIO• 3 years ago

Not mentioned in the article, but it’s not uncommon that companies bribe Amazon employees to look the other way or help committing these frauds. Some people told me that they even protect you from being downranked.

They created variations of their best selling products so their new selling products get on the same page as the old ones. You have to look twice at the review for which product it is at the bottom.

It is still fraud and should be punished, but fining this is like a police officer fining you for parking on a disability spot, while a murder is happening 20 feet away.

thaumasiotes• 3 years ago

Amazon itself is much worse about this practice than I assume The Bountiful Company was. They "unify" reviews for different DVD and Blu-Ray releases of the same film; they unify reviews for different translations of the same book... it's completely absurd.

Go to Amazon's page for any media item such as a movie or a TV show, and you'll see that all of the reviews take pains to indicate what product they're actually talking about, because everyone recognizes that all of the reviews are mostly displayed on products they're not related to.

This article explained the concept of the fraudulent behavior pretty well. But it didn't give even one example of two products that were inappropriately variated. As far as I learned from the article, the company being fined never did anything wrong!

The complaint ( https://www.ftc.gov/system/files/ftc_gov/pdf/the_bountiful_c... ) is more detailed, but it doesn't seem to make the case that there was a problem:

Later in 2020, Respondent began selling a new Nature’s Bounty Zinc Gummies product to Amazon for sale on Amazon.com. In August 2020, before the launch of the Zinc Gummies product, the Ecommerce Customer Development Director, wrote in an email:
> [m]oving forward we are going to launch skus with variations that make sense: i.e. Zinc gummy with zinc tablet – gives the strongest opportunity to win from day 1 – gives relevancy, page 1 view, ... increased Conversation, and sales. We are seeing success with this strategy ....
Respondent requested that Amazon create a variation relationship including Zinc Gummies, and two of Respondent’s established products, Nature’s Bounty Calcium Magnesium & Zinc caplets and Nature’s Bounty Zinc 50 mg caplets. The products had different formulations, including different amounts of the main ingredient or additional ingredients. The Zinc caplets were Amazon.com’s “#1 Best Seller in Zinc Mineral Supplements.”

So the theory seems to be that by listing their different zinc products as variations of each other, someone was getting defrauded.

But I don't see why "40mg zinc" caplets and "50mg zinc" caplets shouldn't be considered variations of each other (different amounts of the main ingredient!), and I also don't see why "40mg zinc" pills shouldn't be considered variations of "40mg zinc" gummy candies (different additional ingredients!). I don't see a big problem with the fact that Tylenol comes in a variation that includes a sedative ("Tylenol PM" - different active ingredients!). How is this different?

mkoryak2• 3 years ago

According to Amazon, “more than 99 percent” of the products people view on its marketplace “contain only authentic reviews.”

Since when does Amazon respond with dad jokes?

Over 99%? Who are these people that see that??

subroutine2• 3 years ago

Imagine if they actually think that!

It's such a wild claim. It would be impressive if 99% of reviews were authentic. But they are saying 99% of their most popular products do not have a single unauthentic review.

mkoryak2• 3 years ago

You would think that if they could tell authentic reviews from the fake ones, they would remove them fakes :)

Fatnino3• 3 years ago

I bought some shoes on Amazon. They were ok, nothing special, a few complaints. 8-9 months have passed and the shoes are on their last legs. I hop on Amazon to shop for similar but better shoes.

While I'm there, I figure I might as well leave an authentic review on the previous pair of shoes now that my use of them is complete.

I can't find any way to leave a review.

Anyhow, I find it highly dubious that 99% of the reviews on Amazon could be authentic.

subroutine2• 3 years ago

Tactics like bait & switch, abuse of variations, and rebranding are so rampant on Amazon I wonder why Bountiful piqued the FCC's interest.

Every Amazon search is riddled with products gaming the platform. I just ran a quick search for "oscilloscope" and found 29 listings for the same 2 products...

https://www.amazon.com/hz/wishlist/ls/3RJY10Y7MQVK0?ref_=wl_...

FTC fines supplement maker $600k for 'review hijacking' Amazon listings

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