Chinese Companies Suing Amazon After Getting Banned For Review Fraud
Several Chinese companies are suing Amazon after getting banned for review fraud. The companies filed a class-action complaint on September 13th, after Amazon recently announced that it had banned some 600 Chinese brands, selling products across 3000 seller accounts, accused of paying customers for leaving positive reviews about their products.
The companies listed in the complaint are trading as:
- Recoo Direct
- and Tudi
In their law suit, they are seeking "recovery of funds that are being illegally and improperly withheld by Amazon" and to "stop any further misappropriation and misuse of funds that are legally and rightfully due to thousands of Amazon sellers and merchants."
The companies do not deny that they violated Amazon’s policy forbidding "incentivized reviews" but they are suing for the "several hundred dollars to hundreds of thousands of dollars" of their claimed earnings held by Amazon.
Amazon’s Services Business Solutions Agreement, strictly states that Amazon reserves "sole discretion" in deciding whether or not to permanently withhold funds owed to a company that violates its policies. However, these banned companies are arguing that since Amazon is in charge of distribution, it should have been aware the companies were offering gift cards to customers that left positive reviews.
Interestingly, even though Amazon banned these companies (and many more) indefinitely, there have been reports that their products are still available on the Amazon platform through different sellers.
Source: The Verge