British retailers challenge Amazon over alleged unlawful fund freezing, sparking legal action.
- Retailers claim up to £300,000 in sales proceeds unfairly blocked, impacting business operations.
- The lawsuit, led by a prominent UK law firm, highlights concerns over Amazon’s seller agreement violations.
- Amazon’s new refund policy and previous market behaviors add to the mounting legal pressures.
- The legal challenges raise significant questions about Amazon’s practices and seller relations.
British retailers are bringing a lawsuit against Amazon, accusing the online retail giant of unlawfully freezing sales proceeds. This legal action is a response to what sellers describe as unfair practices that have left some businesses unable to access up to £300,000 in owed sales.
The lawsuit is being spearheaded by the Fleet Street law firm, Rosenblatt. According to their partner, Dean Nicholls, the firm’s clients have been largely ignored by Amazon, despite providing extensive documentation such as invoices and buyer information. One client described the experience as humiliating, saying, “They treat us like second-class citizens—ignoring us and sending automated emails.” There are approximately 100,000 sellers on Amazon’s UK marketplace, which generates over £25 billion annually. Nicholls suggests that Amazon’s actions could be a breach of their agreement with sellers.
Amazon’s introduction of a refund policy intended to temporarily hold funds has reportedly exacerbated these issues. This policy initiative, which was not adequately communicated to all sellers, particularly in the EU and UK, has resulted in numerous complaints. While Amazon has started to release some funds following outcry, the dissatisfaction among the seller community persists.
The scrutiny Amazon faces is further intensified by previous allegations tied to competitive practices. A class action lawsuit claims the company has been undermining independent sellers by misusing sales data to promote its own products. These actions are perceived as potentially giving Amazon an unwarranted edge in the market, a concern also previously investigated by the Competition and Markets Authority (CMA). Amazon has since committed to ensuring it does not unfairly capitalize on sellers’ data.
In response, an Amazon spokesperson reiterated the company’s commitment to a fair and trustworthy marketplace, emphasizing that, “We only succeed when the businesses we work with succeed.”
Ultimately, the legal proceedings against Amazon underscore significant concerns over its marketplace practices and seller relations.
