Amazon Pilots Online Screening Of New Sellers During Pandemic

Amazon.com Inc. AMZN has piloted a program to screen new sellers on its platform through video conferencing, Reuters reported Sunday.

What Happened

The new method to combat fraud on its e-commerce platform started early in the year, and included both in-person and online interviews for about 1,000 merchants across China, the United States, the United Kingdom, and Japan, Amazon said, according to Reuters.

As the novel coronavirus (COVID-19) pandemic worsened in February, Amazon switched to video conferencing alone due to social distancing guidelines from health experts and authorities across the globe, the Seattle-based company noted.

According to Reuters, the move particularly affects sellers based out of China, who may have registered multiple accounts with Amazon using private internet networks or fake utility bills.

Research by Marketplace Pulse in 2019 suggested that Chinese sellers accounted for about 40% of the top 10,000 sellers on the company's platform.

Why It Matters

Amazon has long faced criticism for rampant counterfeit products on its platform.

Apple Inc. AAPL called out the company, and sued one of the third-party sellers on its platform back in 2016, saying the counterfeit products put its customers' safety at risk, BBC reported at the time.

Amazon launched "Project Zero" in 2019, in response to the mounting complaints. The project aimed at giving brands more control over counterfeit products in their name, including removing third-party seller products directly, without the Jeff Bezos-led company's intervention.

Price Action

Amazon shares closed 0.45% higher at $2,410.22 on Friday and were mostly unchanged in the after-hours session.