Domain Daily: Amazon Sues Over Fake Reviews

The Dose

  • Amazon Takes on Fraud

  • Apple Slows Hiring

  • Bitcoin Miners Sell Their Stashes


Amazon Goes to Court Over Fake Reviews

The online retailer is suing the administrators of more than 10,000 Facebook groups that pay people to write fake product reviews.

The Point: Believe it or not, writing fake product reviews is a cottage industry. The more reviews a product has on Amazon's website, the more likely you are to see it and, presumably, buy it. Plenty of companies are willing to pay people to write reviews for their products. It's cheaper than paying for advertising and, despite advancements in AI, nearly impossible for Amazon to outlaw. So Amazon is going after the Facebook groups that organize the creation of these fraudulent critiques. What might the impact of this be? Well, if it works, you might see fewer knock-off products proliferating your Amazon searches. If the companies that make these counterfeit products can't pay for promotion, they may no longer be able to dupe people into buying their products.  

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Apple Plans to Slow Hiring in 2023

Bloomberg reported that Apple is curtailing its hiring plans. It's yet another sign that companies are preparing for an economic slowdown. 

The Point: Lately, we've been writing about tech companies curtailing hiring. But it's hard to ignore the signal coming out of Silicon Valley. Apple, as we've said in prior editions of the Domain Daily, is as prepared as any company in the world to weather an economic storm. Even so, the iPhone-maker is reportedly opting to take preemptive action rather than risk getting caught off-guard if market conditions continue to deteriorate. The takeaway here isn't that Apple is in any trouble. It's not. But instead, it's an indication of where the world might be going over the next few months.  

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Bitcoin Miners Are Selling Their Coins

According to CNBC, Bitcoin miners sold $300 million worth of the virtual currency in a single day last week.  

The Point: As you'd expect, Bitcoin miners are big believers in the digital asset. As such, many try to hold onto as many of their coins as possible. During the last bull run, more than a few of these companies said they never planned to sell any coins. So if they weren’t going to sell their product, how did they plan to fund their business operations? The thinking was that they could use their Bitcoin and mining rigs as collateral to borrow cash. And as Bitcoin’s price soared to almost $70,000 a coin, that strategy, despite the obvious risk, made sense. But now that Bitcoin is trading closer to $20,000 that plan has fallen apart. Why? For starters, at the lower price, miners have less collateral to put up for loans. While this is putting pressure on Bitcoin’s price now, it could also signal that the bottom is in. Miners hold a lot of coins and they’ve typically only been sellers when the price falls precipitously. If they change their funding models to sell more regularly, that could result in less dramatic sell-offs in the future.  

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