British retailers file a lawsuit against Amazon over allegedly unlawful freezing of sales funds.
- Some retailers report blocked funds amounting to as much as £300,000.
- Fleet Street law firm Rosenblatt leads the legal proceedings.
- Amazon’s new policy on holding funds has caused issues for sellers unaware of the changes.
- Amazon has faced previous allegations of unfair practices against UK retailers.
British retailers have initiated legal proceedings against Amazon, accusing the company of unlawfully freezing funds from sales transactions conducted on its platform. Retailers claim these actions have significantly disrupted their business operations and cash flow.
The lawsuit, spearheaded by Fleet Street law firm Rosenblatt, includes reports from businesses that have had up to £300,000 in sales proceeds frozen. Rosenblatt client Dean Nicholls noted that Amazon’s seller agreement clearly outlines the conditions under which funds can and cannot be withheld. “It’s been a humiliating process,” a retailer remarked, highlighting the frustration caused by Amazon’s automated response system and perceived neglect.
The legal contention arises amidst Amazon’s implementation of a new policy, which aims to temporarily retain funds to account for potential refunds. This policy shift has sparked controversy, particularly among sellers who were not adequately informed of these changes in the UK and the EU.
The situation has stirred significant concern among the approximately 100,000 sellers operating within Amazon’s UK marketplace, which has a substantial turnover exceeding £25 billion annually. In response to complaints, Amazon reportedly began releasing some funds in August 2023.
Amazon’s spokesperson emphasised the company’s dedication to a trustworthy business environment, stating that the success of the businesses they collaborate with is integral to their own success. Nevertheless, the current lawsuit is not the first legal challenge Amazon faces in the UK. A separate class-action lawsuit led by the British Independent Retailers Association accused Amazon of using its market dominance to unfairly disadvantage independent sellers.
This class-action suit contends that Amazon abused its access to sales data to launch competing products, manipulating site features such as the ‘buy box’ to prioritise its offerings. Previously, the Competition and Markets Authority (CMA) investigated these claims, leading to Amazon committing to fair data use practices.
The ongoing legal challenges underscore tensions between Amazon and UK retailers over market practices and financial policies.
