Digital scale has a long history as a retailer, but it’s since come under scrutiny for its role in facilitating child pornography, trafficking, and child prostitution.
The company was recently caught in a child porn sting, and in 2016, the Federal Trade Commission slapped it with a $30 million fine for “misleading consumers” about the content of its digital scale stores.
The FTC investigation prompted the company to cut back on some of its online offerings, which led to some customers reporting they were unable to get back into the digital scale business.
But the company has continued to expand into new markets, including the popular e-commerce platform Amazon.
“As Amazon has expanded into new territories, digital scale has continued its expansion in other markets, such as retail, with the acquisition of online marketplace Etsy,” the FTC noted in a press release.
Digital scale stores are among the more popular online retailing platforms, and Amazon has been the company’s largest online seller.
(The company also owns brick-and-mortar retailers such as Walmart, Best Buy, and Target.)
But the FTC found that digital scale wasn’t necessarily an equal match for traditional retailers.
In one study, Digital Scale found that only 2 percent of online shoppers were able to “fill in the gaps” between online and physical sales, compared to 5 percent of brick- and-mortars.
“There are many reasons why digital scale does not compete directly with traditional brick-to-morty retailers,” the company said in its 2016 investigation.
“Online retailers have fewer physical stores, lower transaction costs, and lower costs of distribution and marketing.
Digital retailers are not as adept at identifying, securing, and tracking potential buyers, as traditional brick and mortar retailers.”
Amazon, which has been accused of engaging in child pornography by at least four women who claim they worked there, has been a big proponent of online sales, though its products are not available for purchase on physical shelves.
Amazon’s recent moves to expand online sales in the United States have drawn criticism from civil liberties groups, who have argued that it has no legitimate reason to keep these online stores online.
The government’s crackdown on online sales could be hurting digital scale’s bottom line, however.
In 2017, the FTC also accused Digital Scale of using fake customer profiles to lure customers in, as well as for its inability to ensure that the products being sold on its site weren’t child porn.
According to the FTC, Digital Scope’s online sales account for more than 30 percent of its total revenue, and that number is growing each year.
The report concluded that digital scales’ online business model “will result in substantial losses to its customers, including consumers and businesses.”