Fake Reviews on Amazon
Since the rise of e-commerce companies, there appears to be rise in false reviews online as well. In large companies such as Amazon, Yelp, and TripAdvisor, there appears to be a shocking large amount of reviews written by people who never bought nor tried the product. These fake reviews arise for the purpose of increasing sales of certain products. These reviews come in both positive and negative means. Positive reviews can directly bolster the sales of one product. Negative reviews can indirectly bolster sales of a product by decreasing the credibility of a competitor or sometimes even competitors. About 45% of consumers consider product reviews when considering an online purchase and 2/3 of these shoppers trust the opinions online.
So why don’t these online vendors advertise instead of encouraging fake reviews? Well small companies don’t have the funds to purchase super effective advertisements. It is cheaper to pay for fake reviews than it is to advertise. This has quite a strong effect. Normally, large vendors dominate the consumer field. Many different social groups tend to use the products of the massive industries. Fake reviews aim to convert random individuals (as people who read online reviews are not all in the same social circle) into being a user of the products from the smaller vendor. From this, there can eventually be a cascade in which many individuals and even social circles start using the products from the smaller vendor.
However these fake reviews are deceiving and bear legal consequences. As for Amazon, they are suing individuals over posting these false reviews. Since the knowledge of false reviews on sites such as Yelp has made the public upset, Amazon fears that the false reviews will harm its credibility of an e-commerce company and ultimately harm its sales. Although suing 1000 individuals may not seem to be a lot for a company this large, it will send a message to the public that Amazon does not condone such activities in its domain.
Source: http://www.huffingtonpost.com/entry/amazon-sues-1000-people-over-fake-reviews_56251dc7e4b08589ef483531