Ecommerce behemoth Amazon (NASDAQ: AMZN) filed a lawsuit against the administrators of over 10,000 Facebook (NASDAQ: META) groups that allegedly incentivize fake reviews on the company's flagship platform.
Per Amazon's press release, the company is undertaking litigation to learn the identities of group administrators, as well as seek cease-and-desist orders against them. Amazon is also looking to recoup its legal fees from the defendants. The company is singling out groups that contributed to a rise in fake reviews posted to Amazon's ecommerce storefront in the U.S., U.K., Germany, France, Italy, and Spain.
"Our teams stop millions of suspicious reviews before they're ever seen by customers, and this lawsuit goes a step further to uncover perpetrators operating on social media," said Dharmesh Mehta, Amazon's vice president of Selling Partner Services. "Proactive legal action targeting bad actors is one of many ways we protect customers by holding bad actors accountable."
The Facebook groups in question represent a "shadow industry" of sorts that has grown around incentivizing consumers to post positive reviews. While fake reviews have been a problem for years because of this "industry", the explosion of ecommerce demand among consumers during the COVID-19 pandemic caused the issue to become substantially worse.
A cursory Google search unveils how-to guides for sellers to find reviewers who are suspiciously ready to leave positive reviews, as well as lists of Facebook groups to contact for "help." On one such site with over 150 listings for Facebook groups in several of the countries listed in Amazon's lawsuit, a high number of groups are either private with little information publicly visible or are completely inaccessible due to privacy settings or having been removed by Meta.
Members of these groups are incentivized by sellers themselves, while administrators simply collect commissions from sellers for providing reviewers. The Hustle's Zachary Crockett, while investigating a few groups from within, was offered refunds for his purchases in addition to "commissions" in the form gift cards and PayPal (NASDAQ: PYPL). The problem has been so prevalent for so many years that third party solutions have been developed, such as ReviewMeta, which filters out fraudulent reviews using an algorithm.
While Meta has removed plenty of groups in response to Amazon's complaints, as well as investigations by members of the press, thousands more are still active. For its part, Amazon has banned hundreds of sellers from its storefront for incentivizing fake reviews, including a large number of Chinese companies like Vava and Mpow.