Amazon's removal of Aukey, RAVPower and other brands is 'only the beginning'

Amazon's removal of Aukey, RAVPower and other brands is 'only the start'

(Image credit: Shutterstock)

Fake reviews take been a problem on Amazon for years. And there have been enough of articles written online (including this i from ThePennyHoarder ) detailing how users tin can get paid to write reviews on Amazon. Only Amazon updated its customer reviews policy in 2016 prohibiting whatsoever sort of incentivized review. That includes anything from free products to gift cards.

So why are and so many brands getting kicked of Amazon recently? It seems that the likes of Aukey, Mpow, Tomtop and the Sunvalley Group, the parent company for RAVPower, Taotronics and VAVA, never got the memo.

These are the best portable chargers and power banks available now
Prime Day 2021: The all-time deals for working from home
Plus: Peloton will brick your $4,300 treadmill if you don't pay the $40 monthly fee

In May Aukey and Mpow were delisted from the Amazon marketplace post-obit a written report by SafetyDetectives. The site uncovered a network of 3rd-political party companies that would solicit actual Amazon customers to buy products and go out a positive review. After the review was posted, the user would exist refunded the purchase price via PayPal, effectively getting the product for gratuitous.

Information technology was a clever system that worked effectually Amazon, using other services to communicate with buyers and get them paid.

It's why Amazon is at present asking social media companies to up efforts in spotting "bad actors" that offer incentives for favorable reviews.

Earlier this month, Nicole Nguyen of the Wall Street Journal reported that RAVPower, makers of portable battery banks, headphones and other electronic devices, were offer gift cards in exchange for reviews. In fact, Nguyen had bought a charging brick off Amazon and institute a souvenir bill of fare offer within.

Afterwards Nguyen's report, and Amazon's subsequent delisting of RAVPower, Taotronics and VAVA, the Sunvalley Group's revenues dropped 31% and its stock had fallen 12%.

RAVPower'south parent company has issued a statement maxim that iii of its brands (incl. Taotronics and VAVA) were suspended from Amz yesterday, affecting 31% of the company's revenue, and it volition rely on its DTC site. The stock is downwards 12% today. https://t.co/6hKeLiyvgmJune 17, 2021

Meet more

However, all of these brands were some of Amazon'due south top sellers. Some believe that bogus reviews have been an open secret at the e-commerce giant for a while, and that it wasn't until regulatory pressure by the FTC did the visitor brainstorm acting. Vox'due south Recode actually acquired some internal messaging and found that for some of its largest sellers, the visitor essentially let bad practices slide.

"Communications between Amazon employees viewed past Recode also appear to betrayal an inconsistent penalisation organization in which employees need special approving for suspending sure sellers because of their sales numbers, while some merchants are able to keep selling products to Amazon customers despite multiple policy violations and warnings."

Gaming the organisation

Given that 89% of consumers are likely to buy at Amazon over other online sites, there's a lot of coin to be had when landing on the first search folio. Like Apple, Amazon occupies a very small club of $1 trillion dollar companies. Considering that Amazon has over 12 million products on its marketplace, landing at the height of search results tin mean tremendous sales.

Amazon's algorithm works to push the all-time products in front of consumers. And a keen way to approximate if a product is expert are five-star ratings.

"In early 2012, the Amazon catalog grew too big, and the merely manner to get to the top of search results was to bear witness to the algorithm that your production was the all-time," said main executive of Marketplace Pulse Juozas Kaziukėnas in an interview with the Wall Street Periodical dorsum in 2018. "Almost sellers realized acquiring reviews was a aureate ticket."

Given the deluge of products, it'southward non besides surprising that sellers started looking to other means to pump up 5-star ratings.

Co-ordinate to Saoud Khalifah, CEO of Fakespot, a browser extension and app that points out fake reviews, of the companies mentioned above, a huge percentage of reviews were either fake or coerced.

"The average Fakespot grade for these companies is a C grade for thousands of listings," said Khalifah in an interview with Tom's Guide. "The average percentage of simulated reviews on the listings would range from xx% to 70% in some instances."

Pressure mounts from FTC

Another dynamic throughout all of this is the recent appointment of Lina Khan, an associate law professor at Columbia Law Schoolhouse with expertise in antitrust and competition, as chairperson to the FTC.

"The new appointment of Lina Khan will only increment the pressure level on Amazon to combat the rampant fraud on their platform. The problem isn't only with fake reviews. At that place are as well fake upvotes, counterfeits, misleading information and many more problems that Fakespot detects," said Khalifah.

We reached out to Amazon for comment, and the online retailer says it has upped information technology game on weeding out fake reviews.

"Amazon relentlessly innovates to permit only genuine production reviews in our store to help earn the trust of customers,'' said an Amazon spokesperson in an email to Tom's Guide. "In 2020, we stopped more than than 200 1000000 suspected false reviews before they were ever seen past a client, and more than 99% of reviews enforcement was driven past our proactive detection."

A reckoning is coming

Lina Khan, nominee for Commissioner of the Federal Trade Commission (FTC), arrives at at a Senate Committee on Commerce, Science, and Transportation confirmation hearing on Capitol Hill on April 21, 2021 in Washington, DC. — (Paradigm credit: Saul Loeb-Pool/Getty Images)

While faux reviews take been a trouble on Amazon for a few years now, co-ordinate to Khalifah, in 2020 and 2021 fake reviews had reached an all-time high on Amazon internationally.

Nevertheless with Aukey, RAVPower and others now delisted, that leaves a massive gap in electronics sales at Amazon. At the moment, information technology's uncertain if Amazon will allow these sellers to return.

"No inkling who fills the void, but likely each departed brand's sales volition be carve up amidst the other brands in the same product category," said Michael Pachter, a research analyst at Wedbush Securities, in an interview with Tom's Guide. "At that place is no reason to conclude that Amazon's article brands will benefit in a asymmetric way."

While Pachter and regulators agree that ultimately removing brands that post incentivized reviews will be good for the consumer, there'due south still a long way to go for Amazon to purge this exercise from its marketplace. For Khalifah, whose entire company is centered around finding and spotting fake reviews, he feels a existent reckoning has however to come.

"This is only the commencement. Backside the Aukey'due south and Mpow's of the world, there are hundreds of other unscrupulous sellers that accept been engaged in the aforementioned or similar deceptive tactics since day-one of selling on Amazon."

More: This iPhone problems kills your phone's Wi-Fi — what you need to know

Imad Khan is news editor at Tom's Guide, helping direct the twenty-four hour period's breaking coverage. Prior to working at the site, Imad was a full-fourth dimension freelancer, with bylines at the New York Times, the Washington Mail service and ESPN. Outside of work, you can find him sitting blankly in front of a Give-and-take document trying desperately to write the commencement pages of a new book.