Chinese companies file class-action against Amazon

Amazon is again in the firing line, after several Chinese companies filed a class-action against the major eCommerce retailer

The organisations filed the class-action complaint against Amazon for banning them from the Amazon marketplace over their use of paid reviews, a new complaint filed on September 13th claims.

Over the course of the past year, the online retailing giant has cracked down on companies soliciting paid reviews on its platform, with reports that it has now permanently banned 600 Chinese brands across 3,000 seller accounts.

The companies listed in the complaint include those trading as Sopownic, Slaouwo, Deyixun, Cstech, Recoo Direct, Angelbliss, and Tudi.

Each organisation is seeking “recovery of funds that are being illegally and improperly withheld by Amazon” and are filing the class action to “stop any further misappropriation and misuse of funds that are legally and rightfully due to thousands of Amazon sellers and merchants.”

The US-based online retailer has a strict policy which bans “incentivised reviews,” which was enacted in 2016.

The companies don’t deny that they violated Amazon’s policy

But the businesses main problem is that Amazon is withholding “several hundred dollars to hundreds of thousands of dollars” of their claimed earnings. 

Amazon’s Services Business Solutions Agreement, which covers Fulfilment by Amazon businesses like the ones these Chinese companies operated, is pretty clear that Amazon reserves “sole discretion” in deciding whether or not to permanently withhold funds if a company violates its policies.

The companies’ counterargument?

Amazon is in charge of distribution in an FBA arrangement, so it should’ve been aware the companies were offering gift cards to customers that left positive reviews. The Verge has asked Amazon for comment and will update if we hear more.