British retailers are challenging Amazon over accusations of unlawfully freezing their sales proceeds, claiming it disrupts cash flow.
- The lawsuit, spearheaded by Rosenblatt law firm, alleges Amazon has blocked sales revenues unfairly, with some retailers seeing £300,000 withheld.
- One retailer described the process of contesting the freezes as ‘humiliating,’ citing a lack of satisfactory response from Amazon despite providing extensive documentation.
- Amazon’s recent policy to temporarily hold funds for refunds has caused issues, with many sellers claiming they were not informed of the change.
- Amazon insists it strives to ensure a trustworthy platform, highlighting the success of independent sellers on its marketplace as mutual success.
British retailers are mounting a legal challenge against Amazon, claiming that the ecommerce giant has been unjustly freezing their sales proceeds. This action, led by the Fleet Street-based law firm Rosenblatt, argues that Amazon’s practices have unlawfully disrupted retailers’ cash flows. Retailers involved in the dispute report having as much as £300,000 in sales proceeds withheld without clear justification.
One affected retailer described the ordeal as ‘humiliating,’ noting the company’s failure to provide a satisfactory response. Despite sending detailed documentation, including invoices and item descriptions, the retailer stated they had only received automated replies from Amazon. The sense of being treated as ‘second-class citizens’ underscores the frustration among sellers.
Amazon UK’s marketplace comprises approximately 100,000 sellers, collectively generating over £25 billion in turnover the previous year. Partner at Rosenblatt, Dean Nicholls, emphasised that Amazon’s agreement with its sellers stipulates clear rules. The law firm contends that Amazon’s actions represent a breach of this agreement, urging affected sellers to join the lawsuit to seek compensation for their frozen funds.
In 2023, Amazon introduced a policy allowing it to hold seller funds temporarily to cover potential refunds. This change was reportedly not effectively communicated to all sellers, causing significant unrest as many found themselves without access to their earnings. Reports from August indicated that Amazon began releasing some funds following widespread complaints.
Amazon defends its position by asserting its commitment to a trustworthy environment for both shoppers and sellers. A spokesperson underlined the fact that over 100,000 small and medium-sized businesses thrive on Amazon UK, attributing success to a robust set of policies. However, these reassurances appear insufficient to quell the growing discontent among retailers.
Further compounding Amazon’s legal challenges is another lawsuit from UK-based sellers, accusing the company of unfair market practices. This separate class action, led by around 35,000 sellers, claims Amazon misused sales data to support its own product lines, disadvantaging independent sellers. Although the Competition and Markets Authority (CMA) acknowledged Amazon’s efforts to rectify unfair treatment of third-party sellers, discontent remains.
The ongoing legal challenges highlight significant tensions between Amazon and its UK sellers, pointing to broader issues of fairness and transparency in ecommerce.
