An Amazon consultant admits to bribing the company’s workers

Leading consultant Amazon.com Inc. On Thursday, he pleaded guilty to bribing company employees in a scheme to give online sellers a competitive advantage that prosecutors say is worth $100 million.

Ephraim “Mr. Dr” Rosenberg The latest standoff was between five US-based defendants for paying Amazon employees for sensitive company data that, among other things, helped them direct business to certain merchants and exclude their competitors.

Four other people have already pleaded guilty and two have been sentenced to prison terms. A former Amazon employee living in India, who allegedly took bribes, has been charged but not prosecuted.

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The scheme, which began in 2017, seemed like something off script Hollywoodwith worldwide payments via MoneyGram, PayPal and bags full of cash sent via Uber.

Rosenberg, 47, apologized for his actions Monday in the mail linkedin, unlike previous statements that insisted he was innocent. Defendants’ highest profile hosted events to network with Amazon sellers in his hometown of New York and also has a Facebook page with 10,000 followers offering advice on selling on Amazon.

“On some occasions, I have paid bribes, directly or indirectly, to Amazon employees,” Rosenberg said. “These actions were against the law.”

In 2020, federal officials charged Rosenberg and other advisers with paying Amazon employees in India more than $100,000 in bribes to give select Amazon merchants an advantage over competitors selling products ranging from electronics to nutritional supplements.

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According to the indictment, the products of some of the defendants were removed for security reasons and returned to the site. For a few hundred dollars, merchants can get inside information from Amazon to erase negative customer reviews of their products. And you might buy a $5,000 “recall,” in which the company’s advisors conspired to remove a competitor from the site by buying their product and leaving negative reviews that they knew would lead to the product being banned.

Rosenberg could face up to five years in prison and a fine of up to $250,000. The ruling, due at a later date, will close an embarrassing chapter for Amazon that revealed the Wild West mayhem unfolding behind the scenes at the popular web store, as some two million merchants vie for a share of the $746,000 million it spends there. annually. .

dangerous precedent

Amazon keeps its algorithms and direct customer reviews to shoppers for the best products offered at the best prices. The bribery scheme showed how company employees could make money by manipulating the system. Amazon consultant Chris McCabe, who previously worked at Amazon, said the company should be more transparent about what it does to enforce rules on the site and monitor its employees to ensure they don’t take bribes.

“A dangerous precedent has been set,” said McCabe, who specializes in helping merchants appeal account suspensions. “Amazon employees know they can get a lucrative job selling inside information.”

Amazon spokeswoman Mira Dix said the company reported the scheme to police and cooperated with the investigation.

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“We have robust systems in place to detect suspicious behavior that we regularly improve, teams investigate, stop proscribed activity, and proactively report this information to law enforcement and relevant authorities,” he said.

Rosenberg still has supporters among merchants who are critical of Amazon’s practices, which can include shutting down businesses without notice or clear explanation. Amazon has suspended merchants for selling counterfeit or dangerous products and violating other policies, but some merchants say they have been unjustly denied access to the site and have few resources, which has put them out of business.

“I’ve seen a lot of sellers unfairly shut down by Amazon,” said Chad Rubin, who sold vacuum cleaner parts on Amazon and now sells software to online merchants. They made their living back with the help of Ed Rosenberg. This not only nullifies the bad things he did, but it also had a positive effect.”

Others were less forgiving that the network sabotaged competitors, which is a no-go in Amazon’s tight-knit merchant community.

“This is no Robin Hood fantasy,” said James Thompson, a former Amazon executive who is now an e-commerce consultant. “He found a way around it and exploited it to make a lot of money for himself and his clients while pretending to be a leader in this community.”

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