Amazon’s shares fell, but Google’s stock finished positive despite sell pressure caused by news of an investigation.
After reports of a British regulator’s inquiry into Amazon and Google, Amazon’s stock took a blow at the end of Friday’s trading session. If the tech giants haven’t done enough to protect customers from fraudulent product reviews, they may have broken consumer protection laws. Google’s share price fell in the early hours of Friday but recovered to finish in the green.
Amazon.com, Inc. is currently trading at $3,401.46 and lost $47.62, or -1.38%, at the end of Friday’s trading session. GOOGL is trading at $2,450.17, a $0.17 increase after battling tremendous selling pressure that plummeted the price down to $2,432.00, then closing with a +(0.0069 %) gain at the close of the trading day.
Bloomberg reports that the Competition and Markets Authority announced on Friday that it has launched an investigation to gather additional evidence and determine whether the tech giants broke the law by failing to do enough to remedy the problem. It comes after a preliminary investigation in May of last year into how multiple platforms handle bogus reviews, according to the CMA.
“Our worry is that millions of online shoppers could be misled by reading fake reviews and then spending their money based on those recommendations,” Andrea Coscelli, chief executive officer of the CMA, said in a statement. “It’s simply not fair if some businesses can fake five-star reviews to give their products or services the most prominence, while law-abiding businesses lose out,” they said.
Following a move by the United Kingdom’s antitrust agency to crack down on false reports, Facebook Inc. erased 16,000 posts dealing with bogus or misleading reviews two months ago. Last year, Amazon blocked about 200 million suspected fraudulent reviews before they were read by customers, according to the company. It claimed that some of them were caused by “bad actors” using social media sites.
“It’s important that these tech platforms take responsibility and we stand ready to take action if we find that they are not doing enough,” Coscelli said.
AMAZON and GOOGLE responses
According to Bloomberg, in response to the CMA’s pronouncement, Amazon stated that it had provided “significant resources to preventing fake or incentivized reviews from appearing in our store.” Amazon also stated that it will continue to assist the CMA.
Alphabet Inc.’s Google said its “strict policies clearly state reviews must be based on real experiences.”
Google also said in an email statement, “When we find policy violations, we take action from removing abusive content to disabling user accounts. We look forward to continuing our work with the CMA to share more on how our industry-leading technology and review teams work to help users find relevant and useful information on Google.