In short: Some Amazon employees took bribes to delete negative product reviews and leak customer and competitor data, with the Seattle-based e-commerce giant presently investigating such practices as part of a wider effort to curb the increase in review dishonesty on its platform, TWSJ reports, citing people familiar with the situation. The issue is understood to be particularly widespread in China due to the extremely competitive state of its market, as well as the fact that local Amazon employees are earning relatively low wages and are hence more willing to risk their employment for a side income.
Background: Fake product reviews have been a problem on Amazon for years but the new development sheds more light on how dishonest retailers are evolving their practices in order to present their offerings in a better light. Some Shenzhen, China-based brokers are currently allowing manufacturers to have negative product reviews deleted en masse for a one-time payment ranging between $80 and $2,000, having been offering that service for a while now, as per the same report. The same brokers are also selling emails of customers who left negative reviews, sales metrics of competing firms, and can even arrange for banned Amazon accounts to be restored, insiders claim. Amazon has been actively investigating the issue since May, with its probe also including some U.S. employees. The current status of the endeavor remains unclear, though Amazon already reshuffled some of its China management in an attempt to curb the issue.
Impact: Yet another ordeal casting doubt on the legitimacy of Amazon product reviews is a major issue for the retailer that hurts the credibility of its platform, especially in conjunction with the already widespread problem of counterfeit merchandise. The still-developing situation shouldn’t affect the company’s near-term performance which is expected to remain stellar; last quarter, Amazon reported $52.9 billion in revenue and $2.5 billion in net income, having hit a trillion-dollar valuation for the first time ever earlier this month.