business ethics

Business Ethics – All is not Ethical at Amazon

First, a little background on how America is shopping these days. Much of it is online. In fact, this year we will be spending about $124 billion in online sales, and it has been growing at a rapid pace. Of the billions spent, more than $60 billion is spent on the Amazon platform. Business Ethics – All is not ethical at Amazon.

If you use Amazon, you will know that you can buy just about anything. The company is visionary and has changed All is not Ethical at Amazonthe face of shopping forever. There are, incredibly, about 3 million Amazon sellers, ranging from a single author selling a self-published book to conglomerates selling everything from weed whackers to tulip bulbs.

However, behind the amazingly complex, well-designed website, with its massive distribution centers and delivery systems, is another story, a story of unethical behavior within and outside of the company.

The Battleground

Amazon’s 3 million sellers do not always play together well. In fact, the competitive atmosphere has led to data leaks and bribery. Insofar as the bribery is concerned, the organization has focused its energy on India followed by customer support in the U.S. There are reports that independent sellers have successfully bribed customer service people into giving them information on their competitors. Several employees in India and the U.S. have been terminated after leaking competitive information, and the database is now under enhanced security.

However, that is just the tip of the iceberg of unethical behaviors. Here is a sampling of what is occurring in the battleground.

I suppose the most “harmless” is when a seller pays freelance writers to write bad reviews of a competitive product or product line. In the past few months, Amazon has deleted many thousands of fake reviews. Though Amazon requires reviewers to have a verified purchase of the products they were reviewing this was a more recent change. It is, of course, possible to purchase a product, give it a negative review, and then return it.

As there are so many companies on Amazon who act as distributors and not manufacturers, it is not uncommon for one competitive distributor to report another distributor as selling counterfeit products. When this flagging is done, Amazon must remove then remove the product and do an investigation.

In a similar tactic, by hacking into a competitive account (using information it may have bribed to get), some sellers will go into that account and alter pictures, product pages, and descriptions. When the product arrives, the buyer is dissatisfied and cheated.  Amazon claims it has now developed tools to stop that from happening.

The company maintains that it has a strict code of ethics in place:

“We have strict policies and a Code of Business Conduct & Ethics in place for our employees. We implement sophisticated systems to restrict and audit access to information. 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.”

Though the company claims zero tolerance there are still ways around the system such as illegally gaining competitive sales volumes by purchasing wholesale accounts.

Amazon Ethics and Technology

It was originally a case of “Buyer Beware,” and then it came around to “Seller Beware,” but it almost appears that as online sales have exploded, we are once again back to Buyer Beware.

The abuses in the Amazon system while not seemingly rampant are cause for concern. When bribery is involved and releasing database information, can we trust the product reviews, the pictures of the products we see, their descriptions or even their ranking when we type something into the search images? Indeed, there has been evidence of more sophisticated fraud where a company will pay unethical hackers to try to alter the “position” of a product in a search.

With the millions of sellers, millions of products and the hundreds of millions of buyers how are consumers protected? It is a question Amazon needs to answer and address sooner rather than later.

No matter how sophisticated we have become, there will always be those who seize the opportunity to defraud. Amazon can rationalize that it has a code of ethics in place, but is that good enough? Business Ethics – All is not ethical at Amazon.

Leave a Reply