Chinese cross-border sellers: Survive between Amazon and FTC

Now, no one can say clearly how this storm will end.

After experiencing the roller coaster-like market of cross-border e-commerce, the sellers in Shenzhen were terrified of receiving emails from Amazon.

More than two months have passed since Patosun was blocked, and the list of sellers whose stores have been blocked is still increasing. A few days ago, a large number of sellers in Shenzhen reported that they received an email with the same subject: Your Amazon sales authority has been revoked.

The reason for the closure of the store, the content of the e-mail showed that it violated the relevant terms of Amazon’s goods and services, that is, false reviews.

From indifference to everyone’s own danger, under pressure, it has become a good business to pick up a good review card. In fact, reviews have been falsely flourishing on the Amazon platform for many years. Prior to this, both the US Federal Trade Commission (hereinafter referred to as FTC) and Amazon itself have filed lawsuits against sellers of the order. However, unlike the past, this year, Amazon has been unprecedented in its efforts.

Chinese cross-border sellers have gradually realized that Amazon is serious about this round of store closures.

Information shows that Amazon is also facing tremendous pressure. The FTC is continuously putting pressure on the technology giants. Facebook, Google , Amazon and other companies are not immune.

The FTC, which Shenzhen sellers are not familiar with, is the source of the storm.

Store closure storm

Amazon’s store closure has lasted for more than two months.

At the end of April 2021, the main account of the big seller Paterson was closed by Amazon, which caused a lot of shock in the cross-border e-commerce circle. This is the second time Paterson has made headlines this year. At the end of March this year, Cross-border Communication announced the sale of 100% equity of its subsidiary Pattoson . The total price of the underlying equity transfer was 2.02 billion yuan. As Amazon’s well-deserved top seller, this transaction attracted investors from Xiaomi , SHEIN and other investors . However, less than a month later, it became the focus again because it was closed by Amazon.

However, the closure of Paterson’s shop was only the starting point. That time, the Amazon who also money new network responded by saying, round off the shelf is not a “centralized management”, but permanent results of the compliance team and monitoring mechanism is triggered: “The fact that (management) is an operation has been carried out, this The sellers affected this time are relatively large and involve listed companies, so they are more concerned.

However, the development of the situation proves that the situation is far less relaxed than its description. Entering mid-June, cross-border big sellers such as Zebao and Wantuo were blocked on Amazon. According to incomplete statistics from the media, since Patton’s title until mid-May, more than a dozen companies have been titled, involving more than 40 brands. Until now, there are still news of big sellers being blocked or even bankruptcy liquidation.

Although the reasons for the two rounds of bans are different, the direct reason that caused Patosun and others to be blocked is the exposure of the single-shopping industry chain, while Zebao and others violated the Amazon platform rules because the package was accompanied by a discount card request Praise. However, ordering and requesting reviews will eventually lead to an increase in false reviews on the Amazon platform.

Until now, pressure is continuously being transmitted from across the ocean. No one can tell when this storm will continue. The mentality of cross-border sellers is also changing. In early May this year, the Amazon operations in Guangzhou for Wei Ni (a pseudonym) is also on the blog like a network , said the Amazon every year there will be consolidation, but now she has recognized the seriousness of the situation.

Sellers even described that the cross-border seller circle is now in a state of self-defense. Some sellers are also worried that after the cross-border sales are blocked, they may not be able to settle the factory payment, which will further transmit the crisis to the upstream of the supply chain.

Chinese cross-border sellers: Survive between Amazon and FTC

The link could not be found. Picture/Image source: Amazon

FTC stepped in

In mid-June, Amazon’s statement on store closure stated that it has innovated, deployed and upgraded its leading technology based on machine learning on the site, supplemented by expert investigators, and proactively prevented customers from being in Amazon’s malls through a dual method of technology and labor. Seeing false reviews in China, in 2020, more than 200 million suspected false reviews were blocked before customers saw them, and more than 99% of them were discovered and removed by active monitoring. In addition to removal, accounts that posted false reviews will be prevented from continuing to submit reviews, and measures will be taken against seller accounts that obtain commercial benefits through false reviews.

In addition, Amazon will also use litigation to combat false reviews. In April 2015, Amazon filed a lawsuit against the website buyamazonreviews.com because this website provides merchants with paid four-star and five-star reviews; in October 2015, Amazon also posted more than 1,000 paid false reviews on the online platform Fiverr Of users sue in court for providing false comment posting services, selling them on Fiverr.com for $5 to leave a “five-star” comment service symbolizing the best level of a seller’s product; October 2016 Several sellers with more than 50% of false product reviews have also been sued by Amazon…

However, some people in cross-border e-commerce believe that before this, Amazon has been turning a blind eye to false reviews. A report from Vox confirmed their suspicion, and Amazon is well aware of false reviews.

According to Vox, an Amazon employee suggested that six affiliated sellers should be banned. Their annual sales in the market totaled more than 15 million U.S. dollars. Five of these six sellers had been warned for “abusive reviews”, and A seller has been warned three times for “abusing Amazon verification purchases”, but his account has not been suspended.

And Amazon’s indulgent false reviews also has its own considerations. The report also shows that due to the high total sales of banned sellers, they need to provide approval documents higher than the L8 level. Among the more than 1 million Amazon employees, only about 400 have this authority.

Chinese cross-border sellers: Survive between Amazon and FTC

Lina Khan, FTC’s new chairman known for criticizing Amazon / Sina Technology

Stress escalation

But this year, Amazon’s crackdown on false reviews has become more stringent than ever. However, the American media found that the pressure from the FTC was the reason behind it.

The report showed that Patton’s Mpow store had a short-term recovery. “The seller was suspended at the end of March but resumed at the beginning of April.” But the FTC’s pressure on Amazon became the last straw to overwhelm Pattoson . The employee also stated that “we were told not to accept any appeals about the ban.”

In fact, the FTC has been paying attention to the issue of false Amazon reviews for a long time. On February 19, 2019, the FTC initiated a lawsuit against Amazon’s false reviews for the first time. The FTC suspects that the seller of the company named Cure Encapsutions spent money to hire a third-party agency to write and publish false reviews for the weight loss supplement product on Amazon.com, so that the product’s rating on Amazon has always remained above 4.3 stars (the highest 5 stars).

The lawsuit was finally settled on February 26, and the seller was fined $12.8 million. According to The Verge, since then, the FTC has shown increasing interest in abuses in the technology industry. The FTC also announced that it will set up a task force of 17 lawyers to monitor the US technology market. Anti-competitive behavior and take action. However, compared with platform sellers, the FTC is more interested in technology giants, and it has gradually become a trend to strengthen the supervision of technology giants.

During Trump’s tenure, the FTC and the Justice Department’s antitrust law enforcement officers filed antitrust lawsuits against Google and Facebook. It is said that during this period they also launched an investigation of Amazon.

Now, Amazon’s situation is even worse. In November 2020, the European Commission determined that Amazon uses data from third-party sellers to benefit its self-operated retail business and launched a second formal investigation into its core e-commerce business. The U.S. Congress and the FTC are also investigating Amazon’s treatment of third-party sellers. The FTC is also working with the New York and California Attorneys General to investigate Amazon’s online market platform and review its data practices.

On June 15, 2021, the FTC also ushered in its new chairman, Lina Khan. Lina Khan has always been known for criticizing large technology companies including Amazon. In 2017, Lina Khan published an article “Amazon’s Antitrust Paradox” in the Yale Law Journal, which caused a huge response in the legal and political circles. Observers also generally believe that after Lina Khan takes office, the FTC will become more active in enforcing anti-monopoly laws and combating advertising fraud.

The bad news continues to be used. Amazon’s acquisition of MGM has attracted FTC review. Amazon immediately asked FTC chairman Lina Khan to avoid antitrust matters related to Amazon.

At this moment, however, Amazon is at the center of the vortex. Among Amazon’s top sellers, China’s big sales accounted for nearly half, unfortunately, they were caught between Amazon and FTC.

Posted by:CoinYuppie,Reprinted with attribution to:https://coinyuppie.com/chinese-cross-border-sellers-survive-between-amazon-and-ftc/
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