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Chinese companies suing Amazon for banning them

Multiple Chinese companies have come together and are suing Amazon for banning them on grounds of review fraud. They have apparently filed a class-action suit against the online retail giant, in a new complaint that was filed on September 13. This comes even as Amazon recently announced that it had banned some 600 Chinese brands, selling products across 3000 seller accounts, from its platform, after they were found to be paying customers for leaving positive reviews about their products.

Chinese companies suing Amazon for banning them

Image Courtesy: Reuters

Allegations of Misappropriation and Misuse of Funds

The complaint lists a number of companies, including Slaouwo, Tudi, Angelbliss, Deyixun, Sopownic, Cstech, and Recoo Direct, all of which are seeking “recovery of funds” that Amazon has “illegally and improperly” withheld from them. The class action is being filed to prevent any further “misappropriation and misuse of funds,” which the online marketplace apparently owes to thousands of merchants and sellers.

Amazon is strictly against “incentivized reviews,” especially after it put in place a policy regarding the same, back in 2016. Interestingly, while the companies don’t flat out deny that they did, in fact, violate the policy, they have taken issue with the way the giant has withheld “several hundred dollars to hundreds of thousands of dollars” from their revenues.

However, Amazon’s Services Business Solutions Agreement does make it clear that the firm holds “sole discretion” to permanently withhold funds, should a company violate its policies. To counter this, the plaintiffs argue that since Amazon is in-charge of its Fulfilled by Amazon (FBA) businesses which involve these Chinese companies, it should have been aware that they were offering gift cards to rheir customers in exchange for positive reviews.

Trying to Keep Things Real

Interestingly, even though Amazon does say that it has banned all these companies (and many more) indefinitely, there have been claims that their products are still available on the platform through different sellers. Nevertheless, this doesn’t mean that the online retail giant doesn’t have the right to try and rein defaulters in.

Despite its policy regarding incentivized reviews being in place for five years, its implementation had been rather lax until fairly recently. While the companies may be fair in asking for their due funds to be paid, one cannot ignore the fact that even Amazon has been fighting quite a hard battle in trying to reduce the number of fake and falsely positive reviews on its platform.


News Source: The Verge




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