China's biggest seller fights back! Sues Amazon to get money back

According to the latest news from foreign media, several Amazon sellers from China have filed lawsuits in US courts, demanding that Amazon release the funds that were frozen due to the store closure in May!

According to foreign media reports, the brands that filed the lawsuit include Sopownic, Slaouwo, Deyixun, Cstech, Recoo Direct, Angelbliss and Tudi, etc. They were all banned by Amazon for manipulating reviews and had their store balances of hundreds of millions frozen during the strict crackdown on fake orders that began in May. There are more than 600 Chinese brands involved, and more than 3,000 stores have been banned.

These sellers who filed the lawsuit did not raise any objection to the closure of their stores. Instead, they started from the perspective of Amazon freezing the store balance and filed a class action lawsuit against Amazon, demanding that Amazon stop all misappropriation and abuse of sellers' funds and return the illegally and improperly withheld funds to the sellers.

Although Amazon retains a clause in its store opening agreement that gives it "full authority to handle the funds of sellers who violate the rules," it also prohibits sellers from filing class action lawsuits against Amazon.

However, unfair terms may be ruled invalid by the court, and Amazon has recently faced antitrust penalties for its monopolistic behavior against third-party sellers. Therefore, there is not much Amazon can do in terms of store opening agreements.

At present, Amazon has not responded to the lawsuits and related media reports. This is an important step for us Chinese sellers to fight back. Generally speaking, Americans like to sue whenever there is a dispute. The American legal profession can be said to be the most developed in the world. It is useless to reason and play the victim. Litigation is the language that Americans can understand. This step is essential if you want to get money from Amazon. When the group sent the store closure email bug, we suggested that everyone contact Amazon through the lawyer channel. This is also the reason.

So how will the store closure issue play out?

It is already extremely difficult to sue a giant like Amazon. The government has a luxurious legal team at a huge cost. In the United States, a country of common law, lawyers play a very important role, and sellers' chances of winning are worrying.

In addition, it is obvious that the sellers violated the rules first. Even the big sellers did not mention the violation of fake orders when suing Amazon. They can only try to negotiate to reduce losses and ask for the unfreezing of funds and goods. Here, we can seek help from a law firm with experience in handling international business disputes. There is still some room for maneuver.

More importantly, closing stores is essentially a tightening of the Amazon platform environment and a new strategy after the new CEO took office. This means that the closure of stores will not be a one-time cleansing issue. The strict enforcement of platform policies will cause sellers to run into obstacles when they test the red line next time, and they may even face direct punishment from the platform. Closing stores and severe crackdowns will become a normal situation in the future.

Although my country's Ministry of Commerce and relevant European departments have put pressure on Amazon because of the Amazon store closure, the effect is not obvious. Amazon still suspends some of the closures and does not unblock the ones that have already been suspended. This time, the sellers are mainly in the wrong, and the higher-ups are not willing to help them openly. The normalization of store closures means that we have to comply with the regulations. At least some platforms should avoid or avoid crossing the red lines, such as fake orders, abuse of variants, etc. Before the government's antitrust sanctions are implemented, we sellers have to survive.