As Amazon sets its sights on the health care industry, the Federal Trade Commission (FTC) has begun cracking down on fake reviews of products on its site—winning its first case against a wellness product on Tuesday, Kaitlyn Tiffany reports for Vox.
The case against Cure Encapsulations
The wellness company, called Cure Encapsulations, sold a product it purported as a weight loss supplement and appetite suppressant made from an Indonesian fruit called garcinia cambogia, Tiffany reports.
The fruit provided the supplement's active ingredient: 600 milligrams of hydroxycitric acid (HCA), according to the product's advertising. The advertising stated, "Studies have shown that this TIME-TESTED fruit has a myriad of amazing properties." It added, "Literally BLOCKS FAT From Forming!"
However, there is no scientific proof that HCA has any effect on weight loss, though it is used to treat both colitis and inflammatory bowel disease, Tiffany reports. In a complaint filed on Feb. 19 against Cure Encapsulations, FTC argued that none of the promises associated with its products are scientifically substantiated.
The complaint also cited an email from the company's owner, Naftula Jacobowitz, that shows Cure Encapsulations has been purchasing positive Amazon reviews since at least October 2014. In the email, Jacobowitz offers the owners of Amazon Verified Reviews, a fake review seller, $1,000 to write 30 reviews. The email, according to Tiffany, suggests that Jacobowitz would be open to a longer-term partnership with the site in order to keep his product's ratings above 4.3 stars.
On Tuesday, FTC announced it had reached a settlement with Cure Encapsulations under which the company would pay a $12.8 million fine.
The problem of fake reviews on Amazon
Over the past year, Amazon has begun selling a range of medical supplies, aiming to provide hospitals a way to purchase materials outside of the group purchasing organizations (GPOs) through which hospitals conventionally purchase supplies.
But at the same time Amazon is ramping up its health care offerings, it’s continuing to grapple with fake product reviews, Tiffany reports. In October 2016, the company banned the practice of "incentivized reviews," or reviews tied to the offer of free or discounted products. However, that hasn't stopped the practice entirely.
Cheryl Wischhover, a reporter for Vox, used the free online tool Fakespot to see how well Amazon's ban on fake reviews had worked. She tested the product Baebody eye gel which had over 7,000 reviews and an average rating of 4.5 stars at the time of the test. Fakespot determined that 60% of the reviews were "unreliable" and gave the reviews a C rating.
These fake reviews have also been weaponized by competing companies, Tiffany reports. Josh Dzieza in an article for The Verge shared Zac Plansky's story of selling rifle scopes on the Amazon Marketplace.
In August 2018, Plansky discovered that his product had received 16 five-star reviews overnight. The reviews struck him as odd, so he reported them to Amazon, and many of the reviews were gone within days. But two weeks later, Plansky received an email from Amazon terminating his listings from the marketplace for manipulating product reviews. According to Dzieza, one of Plansky's competitors had framed him for purchasing fake reviews in order to get the listings taken off the site.
According to Tiffany, Plansky's story reveals how difficult it is to regulate reviews as "no online review looks any more or less fake than any other."
As for Amazon, the company wrote in an email to the Verge regarding the Cure Encapsulations that it "welcome[s] the FTC's work in this area," adding, "Even one inauthentic review is one too many. 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" (Tiffany, Vox, 2/27).
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