Amazon is ramping up efforts to curb the sale of fake and low quality goods and the posting of fake reviews on its site by bringing claims against an array of its own merchants. The Seattle-based Internet-based retailer, the largest in the U.S., has brought arbitration claims against three of its sellers for using sock puppet accounts to post fake reviews about their products. Over the past year, Amazon has been aggressively pursuing the companies responsible for creating and selling fake reviews, often resorting to legal action. The most recent claims, however, are the first time that Amazon has targeted individual sellers.
In three cases filed with the American Arbitration Association (an alternative dispute resolution organization that provides services to individuals and organizations who choose to resolve conflicts out of court), Amazon alleges that third-party sellers on its e-commerce marketplace, including Michael Abbara, of Fullerton, California; Kurt Bauer, of York, Pennsylvania, who sold products under the name “Barclin Home Products;” and CCbetter Direct, a Chinese company operating under the name “Bardin Home Products,” have created or paid for falsified product reviews.
According to Amazon, many of the reviews originated from “sock puppet” accounts, which are accounts created specifically to post positive (yet unfounded) reviews of various products, including beauty products.
Per TechCrunch: “Since reviews are essential to purchasing decisions, Amazon understandably feels it must prioritize its efforts to stop rule breakers in order to protect the integrity of the marketplace. Still, the company claims just a small minority of reviews are fake.” Amazon is asking the arbitrator to ban the merchants it has identified from using its marketplace and to disgorge them of all profits earned in connection with the goods for which the fake reviews were published. The online retailer is also seeking damages and attorneys fees.
“Our goal is to eliminate the incentives for sellers to engage in review abuse and shut down this ecosystem around fraudulent reviews in exchange for compensation,” Amazon said in a statement on the heels of the recent filings.
If the targeting of individual marketplace sellers sounds familiar, that is likely because it is becoming a common tactic in luxury brands' fights against online sellers of counterfeit goods. While we are used to seeing design houses file trademark claims against a large number of websites and website operators in connection with the sale of counterfeit goods, it is not quite as commonplace for them to file suit against individual marketplace users, but that it swiftly changing.
It is common, for instance, for Chanel to file suit against a handful of defendants hawking fakes. Less common - but absolutely on the rise - is an approach Louis Vuitton took in July 2013, when it filed suit against individual iOffer users. In case you’re not familiar, iOffer is a San Francisco-based online trading community that consists almost entirely of China-based sellers hawking fake Louis Vuitton, Gucci, Chanel, and just about any designer good you can think of.
Others have begun bringing similar lawsuits. Lacoste filed suit against an array of iOffer sellers in December, Gucci filed against iOffer sellers last year and both Chanel and Adidas have filed suit against a handful of individual Amazon.com and iOffer sellers for offering counterfeit Chanel cosmetics, jewelry, and iPhone cases, and fake Adidas wares.
This relatively new approach, which sees design houses naming individual sellers (by their user names, of course) as defendants, is an interesting one in terms of the development of tactics for fighting online sellers of counterfeits, but it may not be the most effective. Chances are, the vast majority of the individual sellers will not be identified and even if they are, they will not be located.
As a result, their individuals shops within Amazon and/or iOffer will be shut down (thanks to a court order) and if the Department of Justice, in connection with the National Intellectual Property Rights Coordination Center, can locate funds that these sellers have amassed from the sale of such counterfeits, they will be turned over to Chanel or whatever design house filed suit.
Regardless, the result of these newly-filed lawsuits should provide some helpful guidance regarding litigation involving individual online marketplace sellers and the posting of fake reviews across an array of websites from Amazon to the likes of LVMH-owned Sephora.