British retailers are challenging Amazon with a lawsuit over frozen funds.
- Retailers accuse Amazon of unlawfully freezing sales proceeds, some losing up to £300,000.
- Law firm Rosenblatt leads the legal action, citing breaches of seller agreements.
- Amazon’s policy to hold funds for refunds sparked confusion in the UK and EU.
- The lawsuit follows previous claims of Amazon’s anti-competitive behaviour.
In an escalating dispute, British retailers have initiated legal proceedings against the ecommerce giant Amazon, alleging unlawful freezing of sales proceeds. The affected parties claim that Amazon has unjustly withheld funds, with some retailers reporting a blockade of up to £300,000. This legal confrontation is spearheaded by the well-established Fleet Street firm Rosenblatt, which argues that Amazon’s actions clearly contravene the agreed terms with its sellers.
A Rosenblatt client expressed deep frustration at Amazon’s response, stating they have been pleading for more than a year to access their legitimately earned funds. Despite providing comprehensive documentation, such as invoices and detailed product information, they report receiving unsatisfactory and automated responses from Amazon, describing the process as ‘humiliating’. This sentiment reflects a broader discontent among the approximately 100,000 sellers who contribute to Amazon’s significant UK marketplace turnover, exceeding £25 billion annually.
Dean Nicholls, a partner at Rosenblatt, emphasized that Amazon’s agreements with its sellers delineate specific rights and obligations, contending that the current treatment of many sellers breaches these terms. Nicholls encourages affected businesses and sole traders to join the legal action to seek compensation if their funds continue to be unlawfully frozen.
Amazon’s policy shift last year to temporarily hold funds for potential refunds without clear seller notification has sown confusion. Although the BBC noted some funds were released following complaints in August 2023, this has not alleviated concerns across the European Union and the United Kingdom.
The current lawsuit adds to a series of legal challenges faced by Amazon, including a previous class action suit by UK-based retailers. This earlier suit accused Amazon of leveraging its access to sales data to gain competitive advantage and manipulating site features like the ‘buy box’ to favour its products. Notably, the Competition and Markets Authority has investigated similar concerns, with Amazon making commitments to refrain from unfair practices.
This legal action underscores ongoing tensions between Amazon and its sellers over competitive practices and contract adherence.
