Amazon.com Inc. is getting help from its home state’s attorney general to clean up fraud on its online marketplace that attracts more than 300 million global shoppers.
Washington Attorney General Bob Ferguson filed a complaint Dec. 6 against Adam and Christopher Bowser, alleging the pair used unfair or deceptive practices to lure Washington residents to seminars costing thousands of dollars that offer “secrets” to gaining an advantage in making money on Amazon.
At the seminars, the techniques presented violated Amazon’s rules for merchants, according to the complaint. The Bowsers also named their Massachusetts-based business in a manner to present an affiliation with Amazon when there was no connection, the state alleged.
Amazon took separate legal action against the two men, as well.
“Amazon has zero tolerance for fraud,” the Seattle-based e-commerce giant said in an email. “Amazon is investing heavily in protecting the integrity of the Amazon marketplace for consumers and sellers. Among other measures, we take independent legal action against bad actors, and we will continue to do so.”
Maintaining order on Amazon — where 2 million merchants compete to win billions of dollars in business — has become a running problem for the online retailer. The trickery escalates during the holidays when the stakes are highest. U.S. online spending in November and December will top $107 billion this year, with the five-day period including Thanksgiving and Cyber Monday the busiest period, according to Adobe Systems Inc.
A common trick is review manipulation. Merchants will arrange deals through social media groups or hire click-farms in China and Bangladesh to buy their products and leave favorable reviews, without Amazon knowing the transactions and reviews are part of a business strategy to get more prominent placement in search results on the web store.
The threat to Amazon is faith in its customer reviews, which it has used to boost confidence of shoppers buying something online they may not have touched or seen first-hand. Two years ago, Amazon filed lawsuits against more than 1,000 people it alleged were writing fake product reviews for money.
In a separate case, Amazon won a $3.6 million judgment against a vendor it accused of gaming its automated inventory ordering system to flood Amazon with inventory it didn’t need, couldn’t sell and the vendor refused to take back.
Amazon merchants have complained the lawsuits and crackdowns are proving to be little more than speed bumps to those looking to game the system, who keep finding new tactics.
(A previous version of this story was corrected to show that Amazon has taken legal action against the Bowsers, not won a judgment against them.)
The cases are Washington v. Bowser, 17-2-31392-1, Washington Superior Court (King County); and Beautyko LLC v. Amazon Fulfillment Services Inc., 2:16-cv-00355, U.S. District Court, Western District (Seattle).