EU regulators are quizzing merchants and others on U.S. online retailer Amazon’s use of their data to discover whether there is a need for action, Europe’s antitrust chief said on Wednesday.
The comments by European Competition Commissioner Margrethe Vestager came as the world’s largest online retailer faces calls for more regulatory intervention and even its potential break-up because of its sheer size.
Vestager said the issue was about a company hosting merchants on its site and at the same time competing with these same retailers by using their data for its own sales.
“We are gathering information on the issue and we have sent quite a number of questionnaires to market participants in order to understand this issue in full,” Vestager told a news conference.
“These are very early days and we haven’t formally opened a case. We are trying to make sure that we get the full picture.”
Amazon’s online shoppers are being fooled by fake review factories running on multiple Facebook groups.
The scam is supported by several large and small companies as well as by entrepreneurs who depend on Facebook to spread positive reviews about their products listed on Amazon to its 2.6 billion users globally.
Fake reviewers, backed by Amazon sellers, post details about the products on Facebook Groups to influence consumers, the Guardian reported on Saturday.
Since the reviewers have to really pay for the items, Amazon is fooled into believing that the buyer is genuine but after leaving a glowing review, the product manufacturing company refunds the purchase price and sometimes also pays an extra fee.
“Which?”, a brand name used by UK-based Consumers’ Association, said that “nearly all” of the Facebook groups it uncovered last autumn were still active, the report said.
Earlier this week “Which?” claimed that Amazon’s system was being undermined by a flood of fake five-star reviews for unfamiliar brands.
“Researchers analysed listings of hundreds of popular tech products and found top-rated items were dominated by brands with names such as Itshiny, Vogek and Aitalk, many with thousands of unverified reviews,” the report added.
In October 2018, “Which?” said two large Facebook groups, plus some smaller groups, may between them have up to 87,000 members potentially engaged in writing fake reviews.
“We don’t allow people to facilitate or encourage the trade of fake user reviews. The groups brought to our attention have now been removed for violating our policies,” the report quoted Facebook as telling “Which?”
“We urge people to continue to use our reporting tools to flag content they think breaks our rules.”
On the other hand, Amazon claimed it invests “significant resources” to protect the integrity of reviews on its site, the report said.
“We have clear participation guidelines for both reviewers and selling partners, and we suspend, ban and take legal action on those who violate our policies,” the report quoted Amazon as saying. (IANS)