Dirty Tricks By Some Sellers At Amazon To Eliminate Competitors. Is Its Resolution System The Best Amazon Can Do?
Many consumers like shopping at Amazon.com. What you may not realize are the dirty tricks and scams among some sellers -- the individuals and firms who provide the products you purchase at the site. The Verge reported:
"When you buy something on Amazon, the odds are, you aren’t buying it from Amazon at all... They are largely hidden from customers, but behind any item for sale, there could be dozens of sellers, all competing for your click. This year, Marketplace sales were almost double those of Amazon retail itself, according to Marketplace Pulse, making the seller platform alone the largest e-commerce business in the US... "
Reportedly, there are 6 million sellers in Amazon Marketplace. So, there's plenty of competition. The Verge article described one dirty track where a seller posted posted bogus 5-star reviews on a competitor's page within the site. When the bogus reviews were removed, the targeted seller was accused of falsely manipulating buyers' reviews -- a violation of the site's rules -- and suspended. The Verge described several attacks by scammers. Here's another:
"Scammers have effectively weaponized Amazon’s anti-counterfeiting program. Attacks have become so widespread that they’ve even pulled in the US Patent and Trademark Office... Scammers had begun swapping out the email addresses on their rival’s trademark files, which can be done without a password, and using the new email to register their competitor’s brand with Amazon, gaining control of their listings... Amazon appears not to check whether a listing belongs to a brand already enrolled in brand registry..."
No online shopper wants to buy products from a seller who has fraudulently taken over a valid seller's trademarks.
Punishment is harsh for violators within Amazon Marketplace: suspension, monies frozen, de-listed from the site, and unable to sell products online. If the suspension lasts long enough or if reinstatement doesn't happen fast enough, bankruptcy can result. And all of this happens behind the scenes unbeknownst to customers:
"For sellers, Amazon is a quasi-state. They rely on its infrastructure — its warehouses, shipping network, financial systems, and portal to millions of customers — and pay taxes in the form of fees. They also live in terror of its rules, which often change and are harshly enforced... Sellers are more worried about a case being opened on Amazon than in actual court, says Dave Bryant, an Amazon seller and blogger. Amazon’s judgment is swifter and less predictable, and now that the company controls nearly half of the online retail market in the US, its rulings can instantly determine the success or failure of your business, he says... Amazon already has something like a judicial system — one that is secretive, volatile, and often terrifying. Amazon’s judgments are so severe that its own rules have become the ultimate weapon in the constant warfare of Marketplace. Sellers devise all manner of intricate schemes to frame their rivals... They impersonate, copy, deceive, threaten, sabotage, and even bribe Amazon employees for information on their competitors."
So, rather than using the established, well-documented public courts and legal system, this happens secretly within a corporation's processes with some unintended consequences:
"... what’s a seller to do when they end up in Amazon court? They can turn to someone like Cynthia Stine, who is part of a growing industry of consultants who help sellers navigate the ruthless world of Marketplace and the byzantine rules by which Amazon governs it. They are like lawyers, only their legal code is the Amazon Terms of Service, their court is a secretive and semi-automated corporate bureaucracy..."
How byzantine? Consider:
"Many sellers can’t even figure out what Amazon is accusing them of. A suspension message will typically list an item along with a broad and tangentially related category of an infraction, like "used sold as new." Understandably, sellers respond by sending invoices that show that the items are, in fact, new. Actually, Stine says, the suspension usually has nothing to do with the item being used, but with something like a peeling label on the box. “The thing Amazon wants you to fix is the buyer perception,” Stine says... JC Hewitt, whose law firm frequently works with Amazon sellers, calls the system’s mandatory guilty pleas, arbitrary verdicts, and obscure language "a Kafkaesque bureaucracy with bad writing." Inscrutable rulings emerge as if from a black box. The Performance team, which handles suspensions, has no phone number; there’s no one to ask for clarification. The only way to interact with them is by filing an appeal, and when it’s rejected, sellers often have no idea why... The secrecy can be so frustrating that sellers have traveled to Seattle or Amazon’s London office to try to find a human, to no avail..."
Huh? What? I'll bet many Amazon customers don't know this. And the system seems to use a poor balance of automation and humans:
"... there were likely humans reading [a seller's] appeal, but they’re part of a highly automated bureaucracy, according to former Amazon employees. An algorithm flags sellers based on a range of metrics — customer complaints, number of returns, certain keywords used in reviews, and other, more mysterious variables — and passes them to Performance workers based in India, Costa Rica, and other locations. These workers choose between several prewritten blurbs to send to sellers. They may see what the actual problem is or the key item missing from an appeal, but they can’t be more specific than the forms allow... The Performance workers’ incentives favor rejection. They must process approximately one claim every four minutes, and reinstating someone who later gets suspended again counts against them..."
Is this the best system possible? Probably not. I hope not. My guess is many Amazon Prime customers would prefer a better system to resolve disputes between sellers. My guess is that most shoppers would want to avoid using sellers who abuse or frame other sellers. And no shoppers want to buy from a seller who has fraudulently taken over another seller's trademarks.
The situation raises several issues:
- A private court system prevents amazon customers from knowing about and avoiding shopping at sellers who abuse or frame other sellers
- A private court system prevents external reviews and/or oversight by independent parties
- An algorithm-based system may save money, but a poor balance of humans and automation causes problems. Is this the best system possible?
- Amazon determines what's in its customers' best interests (versus disclosure and then feedback from customers)
- There seem to be few penalties for sellers who frame or setup other sellers. What fix is underway?
- The current system smells like a bloated monopoly. With some transparency and input, a better system seems possible... preferred.
What are your opinions? What issues do you see? Is a private court system a good thing?