A class-action lawsuit was filed by several Chinese companies against Amazon over the ban they placed on their Amazon marketplace accounts for using paid reviews. The new complaint was filed September 13th. Amazon claims to have banned 600 Chinese brands from its marketplace, and that it has also taken steps to stop companies soliciting paid review.
The complaint names the companies Sopownic and Slaouwo as well as Cstech and Recoo Direct. They are filing a class action to stop Amazon from misappropriating and misusing funds that are illegally or improperly withheld from them.
Amazon established a policy in 2016 that prohibits incentivized reviews. They deny they broke Amazons policy. The problem is that Amazon withholds several hundred to hundreds of thousand of dollars from their claimed earnings. Amazon's Services Business Solutions Agreement (FBA) covers businesses such as those mentioned by these Chinese companies. It is clear that Amazon has complete discretion to withhold funds permanently if the company violates its policies.
What is the companies' counterargument? Amazon is responsible for distribution under an FBA arrangement. Therefore, it should have been aware that gift cards were being offered to customers who leave positive reviews. The Verge reached out to Amazon for comment. We will update this article if we get more information.
Amazon should actually try to enforce its policies. It doesn't have to be more strict than it was before. Although it is easy to sympathize these companies, the reality of building your business on a platform that you don't own at any time can be pulled from under you.
