British retailers are mounting a fresh lawsuit against Amazon after accusing it of “unlawful” freezing of sales proceeds.
The legal action claims the ecommerce giant has been wrongfully freezing the cashflow of sales made on its platform, with some retailers claiming as much as £300,000 in sales have been unfairly blocked.
The legal action is being led by Fleet Street law firm Rosenblatt. One client of the firm said they have been “pleading” with Amazon for over a year to unfreeze funds.
They claimed to have received no satisfactory response despite sending “invoices, supplier and buyer information, item descriptions and quantities”
“It’s been a humiliating process,” they said. “They treat us like second-class citizens—ignoring us and sending automated emails.”
There are approximately 100,000 sellers in Amazon’s UK marketplace, which generated over £25bn in turnover last year.
“Amazon’s agreement with its sellers has very clear rules for what it can and cannot do. We believe that Amazon’s treatment of so many of its sellers is a clear breach of that agreement,” said Rosenblatt partner Dean Nicholls.
“We encourage all sole traders and businesses that sell goods on Amazon in the UK to consider joining our legal action to fight for compensation if their funds remain unlawfully frozen.”
Last year, Amazon introduced a new policy to temporarily hold funds to cover refunds.
The move sparked issues in the EU and UK, where many sellers claimed to not have received the update. The BBC reported in August 2023 that Amazon began releasing some seller funds after receiving complaints.
An Amazon spokesperson told UKTN: “Amazon is committed to providing a trustworthy shopping and selling experience, and we maintain a robust set of policies and guidelines for our customers and sellers to do business.
“Over 100,000 small and medium sized businesses in the UK sell on Amazon’s store and more than half of all physical product sales are from independent selling partners, and the fact is that we only succeed when the businesses we work with succeed.”
The latest legal pressure for the tech giant follows a separate class action lawsuit from UK-based retailers alleging Amazon has pushed independent sellers out of the market by abusing its access to sales data to launch its own rival products.
The suit was brought by around 35,000 sellers and led by the British Independent Retailers Association.
It also claimed Amazon was manipulating access to its buy box – the section of the site which users select which seller to make purchases from – to give its own products an advantageous position.
The Competition and Markets Authority (CMA) has previously investigated Amazon regarding concerns it was giving preferential treatment to its own line of products over similar items sold by third parties.
The CMA in November accepted Amazon’s commitment to ensure it did not unfairly use rival sellers’ data to gain an unfair advantage.