Amazon is now getting sued by a number of Chinese companies after the e-commerce giant decided to ban "paid reviews." The companies are now claiming that Amazon is withholding their earnings.
Amazon Sued by Several Chinese Companies
According to the story by The Verge, there are several Chinese companies that are filing a class-action complaint directly against Amazon. The complaint is in regards to Amazon banning them from the whole Amazon marketplace over the use of certainly paid reviews.
This was according to a brand new complaint that was filed on September 13, 2021. Last 2020, Amazon decided to crack down on certain companies that were soliciting paid reviews on its giant platform. Amazon is also looking into ticketless practices through palm-scanning technology.
Ban on 600 Chinese Brands Over 3,000 Seller Accounts
Amazon reportedly claimed that they have permanently banned a whopping 600 Chinese brands spread across 3,000 seller accounts. The companies that were reportedly listed in the complaints were businesses called Slaouwo, Sopownic, Deyixun, Recoo Direct, Cstech, Angelbliss, and Tudi.
The companies were reportedly seeking to recover funds that are now being illegally as well as improperly withheld by Amazon. The companies are now filing the class action in order to stop any potential future misappropriation as well as misuse of funds that are still legally and rightfully due to the many thousands of Amazon sellers and other merchants.
Amazon Strict Policy that forbids 'Incentivized Reviews'
Amazon now has a strict policy that forbids "incentivized reviews", which was instituted back in 2016. The businesses themselves do not deny that they have actually violated Amazon's policy. Their problem, as of the moment, is that Amazon is still withholding "several hundred dollars" up to thousands of dollars of the companies' claimed earnings.
The official Amazon Service Business Solution Agreement, which reportedly covers Fulfilled by Amazon or FBA businesses just like the Chinese companies in operation, is quite clear that Amazon still reserves "sole discretion" when deciding whether or not to permanently withhold funds if there are any violations in the company's policies.
Amazon FBA Agreement
Amazon's reported counterargument is that the company is in charge of distribution in an FBA agreement. This means that it should've been aware that the companies were offering gift cards to customers that decided to leave positive reviews.
The Verge reportedly asked Amazon for a comment and is still awaiting response. It was noted that actually trying to enforce its policies is actually a good thing for Amazon to do. As of the moment, Amazon is amping up its vaccination efforts by giving out $100K payouts and free cars.
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The Reality of Selling on Different Platforms
It was also stated that just because it remained more relaxed before does not really mean it loses the right to decide to be strict. As of the moment, it is quite easy to sympathize with these companies.
Their experiences, however, are also the reality of building a certain business on a platform that the business itself does not own. This means that at any point, the rug can reportedly be pulled "out from under you."
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Written by Urian B.
