Thursday, February 22, 2024

Chinese firms sue Amazon after being banned for paid reviews

According to a new complaint filed on September 13th, several Chinese enterprises have launched a class-action lawsuit against Amazon. They are accusing the company of barring them from the Amazon marketplace because of their usage of purchased evaluations. Amazon claims to have permanently blacklisted 600 Chinese brands across 3,000 seller accounts in the last year as a result Chinese firms sue Amazon after being banned for paid reviews.

Companies listed in the complaint, which include Sopownic, Slaouwo, Deyixun, Cstech (formerly Recoo Direct), Angelbliss, and Tudi, are seeking “recovery of funds that are being illegally and improperly withheld by Amazon,” according to the complaint. Additionally, according to the lawsuit, the firms are bringing the class action to “avoid any additional theft and misuse of monies that are lawfully and properly due to thousands of Amazon sellers and merchants”.

Amazon has a rigorous policy prohibiting “incentivized reviews,” which has implemented in 2016 and has since been enforced. The corporations do not dispute that they were in violation of Amazon’s policies. There’s a problem, though: Amazon is withholding “a few hundred dollars to several hundred thousand dollars” of their reported earnings, according to them. Amazon maintains “sole discretion” in deciding whether or not to permanently withhold money from a firm that breaches its standards. As stated in the Amazon Services Business Solutions Agreement. Which includes Fulfilled by Amazon (FBA) enterprises like the ones managed by these Chinese companies.

What is the company’s counter-argument? Amazon is in control of distribution in an FBA arrangement. Therefore the company should have been aware that the companies were offering gift cards to customers. Who have submitted positive evaluations on their products.

Case Details

Amazon’s decision to actually attempt to enforce its regulations is a positive step forward. Just because it was more flexible in the past does not imply that it has lost the right to be strict in the present. These businesses have understandably distressed. But their plight reflects the reality of operating on a platform that you do not control at any point. The ground beneath your feet can ripped out from under you.

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