Why Amazon is Suing Companies for Providing False Reviews [e178]

April 17, 2015

Nasir and Matt close out the week by talking about Amazon’s recent suit against companies that are offering paid positive reviews to products sold on Amazon.

Full Podcast Transcript

NASIR: Welcome to our podcast where we cover business in the news and add our legal twist. My name’s Nasir Pasha.

MATT: And I’m Matt Staub.

NASIR: I almost forgot what we were doing.

MATT: Uh… Uh… Uh-oh. He froze. You froze for a minute.

NASIR: Oh, I froze? In real life or what do you mean?

MATT: It’s like you were starting the intro and then you just froze for a second.

NASIR: Oh, yeah.

MATT: You caught it. Don’t worry.

NASIR: Okay. Yeah, exactly. I froze for a second. I was trying to think so… But, anyway, we are doing a podcast this time around and we’re covering an interesting topic, I believe.

MATT: Yeah. I realize on Wednesday we should have done something tax-related since it was Tax Day. Oh well. Too late.

NASIR: That’s true.

MATT: No, we mentioned something in the Amazon… or not that. Amazon’s what we’re talking about today. The Kickstarter thing about taxes, yeah, so I think we’re covered.

NASIR: Yeah, but I’m sure everyone feels the same way. Like, Tax Day is a depressing day. No one wants to be reminded. In fact, on April 15th, assuming you make your payments and so forth, you just want to be done and done with it.

MATT: I like it. I look forward to it.

NASIR: Really? Yeah. Unless you’re getting return, I suppose. I suppose that’s fun.

MATT: Well…

NASIR: It’s been a while for that though.

MATT: Yeah, you shouldn’t but, Amazon, that’s what we’re talking about.
It looks like Amazon has finally – after twenty years of business or twenty years of allowing people to leave reviews for products – it’s finally had enough and it just filed its first lawsuit against, I guess, a few companies for selling fraudulent positive reviews. I think I’m still okay because you know how I run that negative review website so people can come in?

NASIR: Yeah.

MATT: I just leave negative reviews for products.

NASIR: I think that’s available. I think you can do that.

MATT: It probably is.

NASIR: If you’re selling a product on Amazon that only has a few competitors then, man, that would be evil but it’s definitely doable.

MATT: This isn’t exactly what I think we were planning on talking about next week with the negative SEO stuff but it’s kind of related in terms of just unfair business practices that harm the business of a competitor but we’ll save that for next week.

NASIR: Yeah.

MATT: So, this lawsuit was just recently filed in Washington State Court against these websites that are buyamazonreviews.com, bayreviews.net – I don’t get that one. Is that a typo? Maybe “buyreviews.net”? It has to be a typo, right?

NASIR: I think it’s a typo, yeah.

MATT: Buyreviewsnow.com, buyazonreviews.com, whatever. Buy Amazon Reviews, you can have unlimited four- and five-star reviews this week. Our skilled writers look at your product, look at your competitors’ products, and then write state-of-the-art reviews that will sure to generate sales for you. It seems like a very questionable thing. I mean, I looked to the Amazon customer review guidelines which, to me, aren’t very extensive or they need to be more detailed, but it does prohibit. It says, “Who can create customer reviews? Anyone who has purchased items from amazon.com. All you ask is you follow the rules below.” Technically, I mean, without reading the rules below but, technically, you can say, “Hey, I purchased something from Amazon. That entitles me to leave a review on anything,” that’s how I can read that, but there are a little bit of safeguards in the things that are prohibited below. But (1) Amazon needs to improve its review guidelines and (2) these companies probably should word things a little bit better as well.

NASIR: You write the guidelines are not that great. This kind of goes to the whole reviewing process online and the reason why this has become an issue is because these reviews make or break the product of selling, and there are a lot of Amazon sellers. I mean, Amazon is obviously huge and we talked about them on Monday, completely unrelated but it just shows you. I mean, they have quite a big dominance when it comes to the online world of purchasing. And so, with a bad review comes loss of sales and so it’s become very competitive in that nature. But, you also note, there has been a little bit of a backlash from a consumer perspective because now everyone kind of gets an idea that these Amazon reviews are not to be trusted. I mean, at least I have. I mean, when I review something on Amazon, I assume a lot of them are fake just because I’m aware of what’s going on out there.

MATT: Really? I mean, I’ve never thought too much into it. We just bought a bunch of things on Amazon.

NASIR: Well, again, it depends on what the product is because there’s reviews for the sellers that may not be Amazon, like, it’s a fulfilment of Amazon but then the product themselves is a whole different issue. If it’s a reputable product, for example, if I buy a DVD or a video game, I assume Microsoft is not paying to leave a positive review on an Xbox game.

MATT: Who knows?

NASIR: Yeah, who knows? But one thing that Amazon did this last year – I believe it’s been more than a year now probably – is they added that line that says, “This is a verified review.” That’s all well and good but, even with this company, for example, buyamazonreviews.com, they actually sell not only positive reviews but verified purchase reviews. So, actually, you pay them to buy the product and so they become a verified purchaser and then they leave a positive review. Very clever and their prices – if you guys are interested – three reviews starts at $74.26.

MATT: At least one of them described it as, “For $19.00 to $22.00 per review, it’ll provide five-star write-ups in a slow-drip manner to avoid detection by the retailer.” What I also found interesting reading one of these FAQs on one of the Amazon buying sites was a question, “Do we have to write the reviews?” No, you cannot provide pre-written reviews. Reviews will be written from the reviewers only after using your product and they will write accordingly to their choice or how they rate the product – smiley face emoticon. So, what it says is these people that are leaving the reviews are actually using the product which I’m sceptical of to say the least.

NASIR: Yeah, very interesting. If you guys remember our episode where we interviewed those guys, one of the co-founders of Revleap, they were being sued for something similar by Yelp.

MATT: Oh, yeah.

NASIR: It’s different than this company because what they were doing was, okay, as he explained it, as you exited the dentist office, you would get a text message to review. If you had a positive experience, it would send you to Yelp to leave a positive review. If you had a negative experience it would say something like, “Hey! How can we do better?” That’s a little bit different than paying other third parties to leave positive reviews which is what is being accused here but, not only that, this is what they say on their website that they do and the allegations are very similar – trademark infringement, unfair business practices, what else is in there?

MATT: Trademark infringement, unfair business practice.

NASIR: Are you laughing because you just said what I said?

MATT: False advertising, violations on the anti-cybersquatting consumer protect act.

NASIR: Yeah, cybersquatting is interesting because they have, for example, buyamazonreviews.com, Amazon is in the domain name and so the domain name, what Amazon is saying is, “You are using our name, Amazon, to infringe on our trademark within the domain name.” We talked about this a couple of weeks ago regarding all those top-level domain names with Taylor Swift and so forth and this is a real-world example of that.

MATT: Yeah. Like you’re saying, this is different than having someone who actually uses a product or service, having them write the review as opposed to these companies that are pumping out these reviews – you know, “This is the price per review. Pay us and we’ll put a review,” and allegedly people use these products that they’re buying on Amazon which, like I said, I’m very sceptical of that. You know, to me, that’s a level even worse. I know that Yelp prevents people from soliciting reviews but these people that are buying the Buy Amazon Reviews are not soliciting. They’re just paying for falsified things. You’re basically just paying money to put up what is probably a really somewhat fake information up there – or at least fake reviews.

NASIR: To give an opportunity or to take an opportunity – as I’m always going to take it when it’s offered to bash Yelp – to compare Yelp’s review system to Amazon, I mean, I think most people are vaguely familiar with Amazon’s review system. They have some kind of voting system where you can say that this review was helpful or not. It’ll also juxtapose both a featured positive review and a featured negative review to kind of give you an idea of what’s going on there where Yelp makes its own decisions with its so-called algorithm to filter the reviews indiscriminately. And so, when it sues Revleap or it sues these other companies, I don’t have as much sympathy for Yelp because they manipulate their own ratings in the same way that these other companies are. Compare that to Amazon, no review system is going to be perfect but I think theirs is a little bit more fair and all they’re trying to do is not make it unfair for other competitors. They’re actually trying to make their review system more credible by getting rid of these companies that put up these so-called false reviews. That is something, you know, I think that’s something good. That’s something positive.

MATT: You got to it before I could ask you this, you know. What’s Amazon’s motivation to file this lawsuit? I think you’re right; they want to make their review system credible which is the opposite of Yelp from what you and I understand or what we’ve been told by other people that have experienced it first-hand. You know, I’m not a big fan of filing lawsuits but I kind of applaud Amazon for taking the steps. Like, “Hey, we want to be as credible as possible and these businesses are tearing into the credibility of these reviews.”

NASIR: You know what I find weird is also how many of these lawsuits that we’ve been covering for trademark infringement just because these websites use the other company’s logo on their website, you know, there are exceptions. For example, if we’re covering Amazon and we’re talking about Amazon and we use a photo that we have rights to with an Amazon logo on it on our article, that’s one thing. But, having a whole website that is trying to sell services related to Amazon and putting their logo on their website, I’m still surprised people are so oblivious to trademark law in that respect.

MATT: Meh. I’m not that surprised.

NASIR: I guess, yeah. As a lawyer, you’re right. I mean, we shouldn’t be that surprised.

MATT: The key is it’s just trying to trick or convince the actual business or consumer into thinking there’s some sort of affiliation.

NASIR: Yeah. If you think about it though, not only Revleap got in trouble with this but skiplagged.com, that was a trademark infringement because they had these airlines’ logos on it. In Skiplagged, for example – and even Revleap – that trademark infringement is their strongest argument. Everything else is kind of weak, you know. And so, if you were to get rid of that aspect of things, it’d be much more difficult for them to go after you.

MATT: Yeah. So, I kind of applaud this move by Amazon. It almost makes up for all the bad things we’ve talked about that they’ve done.

NASIR: Yeah, I agree. Well, we talked about Google a couple of days ago, right? You know, as far as a good or bad company. You know, Amazon and Google, they’re huge companies – and Apple – and they’re not perfect but one of the reasons why I don’t like Uber and Yelp is because, from a fundamental perspective, at the core of it, they have a lot of disconnect with doing what’s good. Amazon – again, I’m not saying they’re perfect but the same with Google – they have a better philosophy, a better approach. Even though Google’s motto of “Do no evil,” if I recall it right – is that Google or Apple? I can’t remember.

MATT: Google.

NASIR: That’s their corporate motto. Whether they follow that – and maybe, in the beginning, they have but – just the aspect that that is their motto, or at least that’s what they are aspiring to, is a lot better than, you know, what else is out there and I think that’s important from a business perspective when we are in business – and small business to large businesses – that, you know – now I’m getting on a rant here but – we’re all citizens of the society to be able to have a positive effect and you can do that. You can make a bunch of money and still have a positive effect to society and do things in a pretty cool and not evil way.

MATT: Yeah. Just a real quick side story; you know how I live close to North Park in San Diego? There’s a business, a restaurant that closed down maybe a year ago. I don’t remember exactly but the owners of the business wrote, like, on the window in whatever drawing stuff you can use to write on windows, like, “Another small business put out of business by big businesses,” blah blah blah. But North Park is like all these small one-location businesses.

NASIR: What kind of business was it?

MATT: It was just a restaurant. I think it was like a vegan or vegetarian restaurant but the restaurant that’s there now that my wife and I have gone to many times since it’s opened is this very small Mexican restaurant now that is clearly not big business – barely has a website online. It’s just funny. “What do you mean you were shut down by big businesses when every business surrounding you is a one-shop operation?” I just thought that was kind of funny.

NASIR: I’m in the camp, I mean, big business is fine. I think the reason why big business has a bad rap is because they tend to do evil because they’re not taking into consideration alternative factors because, when you have your publicly traded organization, you have to answer to your shareholders and the only thing that your shareholders care about is your bottomline whereas, in a small business, you can make decisions that are a little bit more murky than that. But, yeah, to use the excuse that, you know, the big business put them out of business, I think they would need a little more explanation than that.

MATT: Yeah. I mean, there is a Jack in the Box down the road.

NASIR: That’s what it was – Jack in the Box.

MATT: A lot of people complain about that being there.

NASIR: Really?

MATT: Because it doesn’t fit the aesthetic of North Park.

NASIR: Jack in the Box is based in San Diego, right? I mean, they started there, right? If I recall, I know they have their innovation center up in Kearny Mesa.

MATT: I don’t know. You’re asking the wrong person on that one.

NASIR: I used to live in that area. I always wanted to go in that innovation center and try out their new stuff.

MATT: They’re just creating all these crazy new food items, just hybrids.

NASIR: Honestly, the place is huge so I wouldn’t be surprised if, you know… Anyway, that’s our Jack in the Box episode. You know, thanks for joining us and now I’m getting a little hungry. I’m going to go eat some lunch.

MATT: Yeah. Well, it’s a little bit later in the day for you so it’s still kind of early for me – 4 am.

NASIR: 4 am?

MATT: Yeah. All right. Keep it sound and keep it smart.

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Legally Sound Smart Business

A business podcast with a legal twist

Legally Sound Smart Business is a podcast by Pasha Law PC covering different topics in business advice and news with a legal twist with attorneys Nasir Pasha and Matt Staub.

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