FTC fines supplement maker $600k for 'review hijacking' Amazon listings(engadget.com)
engadget.com
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
11 comments
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.
Reporting fraudulent reviews to the FTC, rather than to Amazon, would be an excellent step towards seeing that happen.
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
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
Thank you for doing so!
Note to self: the returns on review highjacking far, far outweigh the costs.
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_...
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_...
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?
I mean, they can go after amazon for facilitating it.
> 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??
Since when does Amazon respond with dad jokes?
Over 99%? Who are these people that see that??
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.
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.
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.
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.
You would think that if they could tell authentic reviews from the fake ones, they would remove them fakes :)
Should this fine Amazon instead as the marketplace which allows this behaviour?
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
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).
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.
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.
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.
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.
amazon allowing people to do it should be called out.
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.
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.
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?
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?
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.
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.
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.
I think this is the right amount to avoid that question.
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?
Which makes it kinda equivalent to a cop pulling you over and giving you a warning - which wastes probably a nickel in gas.
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.
[deleted]
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.
This is not responsive to my comment.
It's a joke, I wasn't the downvoter. The joke being that's the mechanism that would need to be in effect for dividing fine by market cap to make any sense.
I clicked on the article, was hopeful this was the FTC targeting a Chinese counterfeit seller & review hijacker.. but it was not to be
FTC going after any/all scam is amazing news, not sure why it matters if they're Chinese
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.
How do you know that the scammers are chinese or indian? Most stuff on amazon are just drop ship straight from aliexpress, but what information do you have that tells you who is doing the dropshipping?
You can glance at a listing and just know it's Chinese. They use an odd font for English and do this thing where they make text headers by surrounding words with square-round brackets that nobody outside of China uses.
The ftc gets keep the money they collect. They can't collect anything on chinese companies so best to go after American ones only. I was shopping for outdoor fireplaces on Amazon and looking at the reviews. Interesting that the reviews were for slitherin house harry potter banners rather than the fireplace I was looking at.
https://www.supplychaindive.com/news/upu-postal-rate-change/...
> The grievance that U.S. officials cited in their intention to leave the UPU was the mandated cheaper rates granted to countries designated as “developing” — namely China. Before Option V, packages originating in China weighing less than 4.4 pounds were cheaper to ship to the U.S. than packages of the same weight traveling within the U.S.
> New rates will initially be capped at 70% of domestic rates with the option to increase 1% every year up to 80% — meaning some international shippers will maintain the advantage the administration objected to, just a much smaller one.
China and India are classified as developing nations according to the Universal Postal Union (UPU). As such, it is cheaper to ship from China or India to... say... Chicago than it is to ship the same package from Milwaukee to Chicago.
More about this at https://www.upu.int/en/Postal-Solutions/Programmes-Services/...
> Ever since the 1969 Congress, there have been many efforts to find an equitable formula which takes account of all the factors and complexities involved in remunerating international postal exchanges. As a result, the terminal dues system has become increasingly geared towards costs, as a growing number of mail flows between UPU member countries were subject to country-specific rates for which domestic tariffs were used as a proxy for the costs of delivery. The system has also come to take account of political and economic principles, as well as recognizing the varying levels of economic development of different countries.
> ...
> Over the past decade, consumers’ buying habits have undergone a sea change. People have grown increasingly comfortable making online purchases from retailers located in another country. UPU member countries responded to the challenges of declining mail volumes and the growth opportunities in the e-commerce segment by adopting a reform agenda to modernize, integrate and rationalize the UPU remuneration systems through the Integrated Remuneration Plan (IRP) adopted by the second Extraordinary Congress in Addis Ababa in 2018.
---
Thus, the "it is cheaper to make a scam something in China or India and ship it to the US" combined with "it is easier to disappear with the money / harder for FTC and US courts to get the money" made it that much more tempting.
While the rates are going up for shipping, the other advantages for scams still exist.
> The grievance that U.S. officials cited in their intention to leave the UPU was the mandated cheaper rates granted to countries designated as “developing” — namely China. Before Option V, packages originating in China weighing less than 4.4 pounds were cheaper to ship to the U.S. than packages of the same weight traveling within the U.S.
> New rates will initially be capped at 70% of domestic rates with the option to increase 1% every year up to 80% — meaning some international shippers will maintain the advantage the administration objected to, just a much smaller one.
China and India are classified as developing nations according to the Universal Postal Union (UPU). As such, it is cheaper to ship from China or India to... say... Chicago than it is to ship the same package from Milwaukee to Chicago.
More about this at https://www.upu.int/en/Postal-Solutions/Programmes-Services/...
> Ever since the 1969 Congress, there have been many efforts to find an equitable formula which takes account of all the factors and complexities involved in remunerating international postal exchanges. As a result, the terminal dues system has become increasingly geared towards costs, as a growing number of mail flows between UPU member countries were subject to country-specific rates for which domestic tariffs were used as a proxy for the costs of delivery. The system has also come to take account of political and economic principles, as well as recognizing the varying levels of economic development of different countries.
> ...
> Over the past decade, consumers’ buying habits have undergone a sea change. People have grown increasingly comfortable making online purchases from retailers located in another country. UPU member countries responded to the challenges of declining mail volumes and the growth opportunities in the e-commerce segment by adopting a reform agenda to modernize, integrate and rationalize the UPU remuneration systems through the Integrated Remuneration Plan (IRP) adopted by the second Extraordinary Congress in Addis Ababa in 2018.
---
Thus, the "it is cheaper to make a scam something in China or India and ship it to the US" combined with "it is easier to disappear with the money / harder for FTC and US courts to get the money" made it that much more tempting.
While the rates are going up for shipping, the other advantages for scams still exist.
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.
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.
> 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.
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.
por que no los dos?
It doesn't work when investors can exit before the fraud is discovered
If that was applied to the financial world, we wouldn't have had the 2008 recession and subsequent inflation.