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Chinese Companies Sue Amazon After Getting Banned For Paid Reviews

Chinese Companies Sue Amazon Over Bans For Paid Reviews

Many Chinese companies have sued Amazon for blocking them from the Amazon marketplace owing to their use of paid reviews, according to a complaint filed on September 13th. Last year, Amazon claimed to have permanently blacklisted 600 Chinese brands across 3,000 seller accounts for soliciting paid reviews on its platform.

The complaint includes companies including Sopownic, Slaouwo, Deyixun, Cstech, Recoo Direct, Angelbliss, and Tudi. All these businesses request “recovery of funds that are illegally withheld by Amazon” and are therefore filing the lawsuit to “stop any further misappropriation and misuse of funds that are legally and rightfully due to thousands of Amazon sellers and merchants,” according to the complaint.

In 2016, Amazon enacted a strict policy against “incentivized reviews.” The businesses make no claim to have broken Amazon’s rules. However, they claim that currently, Amazon is withholding “several hundred dollars to hundreds of thousands of dollars” of their declared earnings.  

The official Amazon Service Business Solution Agreement, supporting Fulfilled by Amazon or FBA businesses and Chinese companies, states unequivocally that Amazon has “sole discretion” in deciding whether or not to permanently withhold funds if the company’s policies are violated.

But what is Amazon’s rebuttal? The company says that according to the FBA agreement, the company is in charge of distribution. This means it should have been aware that the companies provided gift cards to customers who chose to submit positive reviews.

Amazon’s endeavour to enforce its restrictions has been characterized as a positive development. However, it doesn’t mean it can’t be strict now because it was more relaxed in the past.  

It is easy to sympathize with these companies; however, their situation reflects the reality of building a business on a platform you don’t control.