Amazon’s Choice, the recommendation Amazon (NASDAQ:AMZN) uses for products on its website, is under scrutiny by The Wall Street Journal.
An investigation from WSJ of 54,400 listings on the website found that plenty of sketchy items earned the Amazon’s Choice label. This even includes products that go against the company’s guidelines.
According to the WSJ investigation, it looks like Amazon hands out the Amazon’s Choice badge without actually vetting the items. This is most likely due to an algorithm that chooses items that get the designation.
The problem with using an algorithm for this is that it can be tricked. Sellers with illegal or unsavory products are able to get the Amazon’s Choice badge by using proper keywords and fake positive reviews on their items. Without an actual person checking on this, AMZN doesn’t know about the problem.
WSJ notes that it did inform Amazon about its investigation and the items in it. The company reacted by removing the Amazon’s Choice label from some items. Others were taken off the storefront and its own policies changed in other cases.
While this WSJ investigation looks bad for Amazon, it could be worse. At least the company doesn’t have to deal with calls for a federal probe into its business. That’s exactly what TJX Companies (NYSE:TJX) is dealing with right now.
NY Senator Chuck Schumer is behind the calls for an investigation into TJX. The reason being is that the company has sold recalled products even after the recalls were announced.
As of this writing, William White did not hold a position in any of the aforementioned securities.