Amazon Reportedly Investigating Whether Some Of Its Staff Are Taking Kickbacks From Merchants

Amazon Reportedly Investigating Whether Some Of Its Staff Are Taking Kickbacks From Merchants

Amazon is reportedly investigating whether independent merchants operating on their platform are greasing the palms of staff to divulge confidential information about the site, the Wall Street Journal reported on Sunday.

According to the report, Amazon staff (primarily located in China) are taking bribes of anywhere from $US80 to over $US2,000 in exchange for internal data like metrics and reviewers’ email addresses, as well as account and review manipulation services. The Journal wrote:

The practice, which violates company policy, is particularly pronounced in China, according to some of these people, because the number of sellers there is skyrocketing. As well, Amazon employees in China have relatively small salaries, which might embolden them to take risks.

In exchange for payments ranging from roughly $US80 to more than $US2,000, brokers for Amazon employees in Shenzhen are offering internal sales metrics and reviewers’ email addresses, as well as a service to delete negative reviews and restore banned Amazon accounts, the people said.

Third-party brokers allegedly recruit Chinese Amazon employees via apps like WeChat. They then act as a middleman, negotiating deals—often in the form of packages. For example, the Journal wrote that a minimum of five deleted reviews for $US300 apiece (a total of $US1,500) tends to be standard.

Other types of internal data include the email addresses of reviewers, who merchants can then reach out to in an attempt to curry favour with tactics like offering free or discounted products, as well as “proprietary sales information,” including keywords, sales volume, and buying habits. Having access to this information allows sellers to game the system by optimising their listings to reach more customers. At a recent third-party conference, the Journal wrote, one presenter allegedly even pulled up internal information that they said ran for $US80 on the black market.

Amazon has flagged a number of cases involving its employees—at least a few of whom are in the U.S.—as well as “shuffled the roles of key executives in China” to stop the misconduct, the paper added. In a statement to the Journal, an Amazon spokesperson wrote, “We hold our employees to a high ethical standard and anyone in violation of our Code faces discipline, including termination and potential legal and criminal penalties.”

This isn’t exactly a huge surprise—as Amazon has increasingly swallowed up huge swathes of the e-commerce market, it’s become one of the prime venues for squeezes every element of its supply chain. As Institute for Local Self-Reliance co-director Stacy Mitchell told Gizmodo, the company’s market dominance has given it an insurmountable advantage it uses to press retailers and manufacturers:

Because most online shopping searches now start at Amazon, rather than at a search engine, virtually every retailer and manufacturer that wants to reach people online has little choice but to set up shop on Amazon’s platform.

The obvious problem here is that Amazon competes with these same companies. Studies and reporting show that Amazon exploits their dependence to undermine them as rivals. According to Harvard Business School research, for example, when sellers list new products, Amazon monitors their transactions and begins selling their most popular items itself.

Of course, then there’s the “relatively low salaries” offered by Amazon in China, while working with the brokers to sell internal data or game the system seems to offer a pretty good going rate. $US1,500 can go a long way in Shenzen, where according to the South China Morning Post the median middle-income worker made about 4,415 yuan a month in 2016.

Other issues that have sprung up on Amazon’s platform have included counterfeiting, which it promised to fight in 2016 but has continued to be a problem, as well as fake review and click farms as well as other attempts to game its algorithms. As the Journal noted earlier this year, competition in China has been particularly fierce as the number of items on Amazon’s marketplace has “doubled over the past five years to more than 550 million,” all at the same time it has encouraged Chinese manufacturers to sell directly to consumers. If sellers don’t land on the first page, then they risk losing their business to those who do.

[Wall Street Journal]