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Caught Ridin’ Dirty: DOJ Indicts 6 With Conspiracy To Bribe Amazon Employees

Caught Ridin’ Dirty: DOJ Indicts 6 With Conspiracy To Bribe Amazon Employees

Amazon
Amazon founder Jeff Bezos during the JFK Space Summit at the John F. Kennedy Presidential Library in Boston, Wednesday, June 19, 2019. (AP Photo/Charles Krupa)

Six people have been indicted by a grand jury in Washington state on charges of conspiring to bribe Amazon employees and contractors to manipulate or restore third-party seller listings on the e-commerce site, including listings for dangerous or defective products, authorities said.

The six people, including two former Amazon employees, planned to pay more than $100,000 in bribes starting in 2017 for products and accounts that Amazon had blocked or suspended from its Marketplace. Third-party sellers, which account for about half the sales on the site, can promote and sell their products on Amazon Marketplace, the Department of Justice said.

The former employees also shared widely internal Amazon information that allowed attacks on other third-party sellers and their accounts, including flooding the sellers’ product listings with fake negative reviews, authorities said.

The indicted posed as consultants, CBS News reported.

The bribe money was in exchange for an unfair competitive advantage, the DOJ said.

Defendants used bribery and fraud to reinstate products and accounts that Amazon had suspended or blocked from doing business, resulting in $100 million-plus of competitive benefits to those accounts and harming competitors and consumers, according to the indictment, Reuters reported.

“The ultimate victim from this criminal conduct is the buying public who get inferior or even dangerous goods that should have been removed from the marketplace,” U.S. Attorney Brian T. Moran said in a statement.

Amazon said it has systems in place to detect suspicious behavior by employees and sellers, and worked with DOJ on the case.

“We are especially disappointed by the actions of this limited group of now former employees, and appreciate the collaboration and support from law enforcement to bring them and the bad actors they were entwined with to justice,” an Amazon spokesman said.

Three of the defendants were based in New York, one in Georgia, one in California, and one in India, The Verge reported.

“Realizing they could not compete on a level playing field, the subjects turned to bribery and fraud in order to gain the upper hand. What’s equally concerning, not only did they attempt to increase sales of their own products, but sought to damage and discredit their competitors,” Raymond Duda, FBI Seattle Special agent in charge, said in a statement.

The reinstated product listings included dietary supplements that had been removed due to safety complaints, household electronics that had been flagged as flammable, and products that had been removed for intellectual property violations. Some of the reinstated accounts had been suspended for posting deceptive product reviews. Others had been removed for making “improper contact with consumers” and other violations of Amazon policies.

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Amazon’s third-party marketplace has been scrutinized by regulatory agencies and lawmakers looking at Amazon’s business practices and whether it hurts small sellers.

Lawmakers questioned CEO Jeff Bezos during an antitrust hearing before the House Judiciary Committee about counterfeit concerns and alleged anti-competitive behavior. Amazon has been accused of copying Marketplace products to create its own competing products, a claim the company has denied.

Experts say the prevailing interpretation of U.S. antitrust law makes it hard to win a case against Amazon, DigitalCommerce360 reported. Action outside the U.S. is more likely — Canada and the European Union — where authorities are also investigating allegations that Amazon is using its monopoly position to hurt competitors and sellers on its online marketplaces. Nothing, though, that would hurt Amazon in a significant way.

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