Big news! A seller whose account has been banned has reached a settlement with Amazon through litigation

As we all know, on the last day of September, there was new progress in the Amazon account blocking incident. Yien.com also immediately followed up with the report "Latest! Several blocked sellers in Shenzhen collectively sued Amazon", which caused widespread discussion in the industry.

From many discussions, we can clearly see that people have two main views on this matter. One view is that these sellers have violated the platform rules by brushing orders, Amazon did nothing wrong, and the sellers’ appeals are unreasonable. The other view is that it is indeed wrong for sellers to brush orders, but Amazon’s punishment is too heavy and very unreasonable.

Ennet fully supports Amazon's rectification of non-compliant behaviors such as fake orders, creating a fair and orderly business environment for more sellers. But at the same time, we also have the same doubts as some people: In this process, are some of Amazon's punishment measures too heavy? Are these measures all legal? If not, how can those sellers protect their rights?

To this end, Yien.com interviewed the China manager of this class action lawsuit, Texun Intellectual Property Law Firm, the US law firm Yingke Law Firm responsible for the litigation, and the sellers who have newly joined the class action lawsuit.

Industry hotly discussed: Shenzhen banned sellers collectively sued Amazon

After the article titled "Latest! Several banned sellers in Shenzhen collectively sued Amazon" was published on Yien.com, it quickly caused heated discussions in the industry.

At present, there are three main opinions:

1. Support Amazon. Sellers who fake orders are guilty of their own fault and have lost face abroad. They should not have the nerve to appeal. Amazon’s current punishment is still too light. Such sellers should be eliminated, the market environment should be improved, and more opportunities should be given to sellers who operate in compliance with the law.

Second, support the sellers. It is wrong to fake orders, and the closure of the store is the punishment these sellers deserve, but the withholding of funds and goods is not, just like a person who runs a red light cannot be arbitrarily shot and killed, so these sellers should appeal to protect their legal rights.

3. Just lie down. Amazon has evidence that the seller violated the rules and signed the third agreement. The market entity is in the United States, so the lawsuit is bound to be lost. Those sellers who sued will not only be unable to get their funds frozen, but will also have to pay a lot of litigation fees.

Among these voices of support or opposition, some sellers have also expressed concerns that if the sellers win, Amazon will secretly make things difficult for them, such as finding all accounts related to previously blocked accounts and blocking them again, or secretly reducing traffic weight.

There are many opinions, but Ennet believes that the second point is more reasonable. Even murderers have the right to hire lawyers to defend themselves, and sellers can also appeal against things they think are unfair to them. And it is not known whether Amazon's withholding of all funds complies with local laws, and sellers should not give up their rights.

Many people would say that the seller has waived the right to collectively appeal by signing the third agreement. But as one netizen said, not all agreements are protected by law. If the content of the agreement violates national laws and regulations, it will still not take effect.

Lawyers in this case: Amazon's indefinite freezing of funds is illegal

In fact, rather than who to support or who to oppose, people care more about whether they can win the lawsuit!

From previous reports, we know that in this lawsuit, the seller did not deny violating Amazon's policies. Its main claim was to recover the funds withheld by Amazon and to prevent any further misappropriation and abuse of the legitimate and legal funds belonging to thousands of Amazon sellers and merchants through class action lawsuits.

Therefore, the focus of the lawsuit by the TeXun and Yingke litigation teams is on Amazon withholding "hundreds to hundreds of thousands of dollars" in revenue and seizing sellers' inventory.

Yingke's US legal team in charge of this class action lawsuit told Yien.com that these claims are supported by relevant legal provisions in the United States, including: first, breach of contract (this cause of action is a common law cause of action); second, violation of California's Unfair Competition Law (Cal. Bus. & Prof. Code §§ 17200 et seq.); third, violation of Washington State's Uniform Money Services Act (UMSA) (RCW 19.230 et seq.) (iv) unjust enrichment (this cause of action is a common law cause of action), etc.

As a private market entity, Amazon has the right to choose which merchants to cooperate with and the right to stop cooperating with specific merchants. In special circumstances, in order to avoid potential legal disputes and claims, Amazon also has the right to temporarily freeze reasonable buyer receivables for a period of time based on the agreement between it and the seller to protect its own interests.

However, Yingke's US legal team believes that Amazon abuses its discretion to indefinitely freeze or deduct all receivables in sellers' accounts (regardless of the amount) without any actual risk of being claimed and without reasonable business purpose, and does not even rule out the possibility that Amazon may use the sellers' receivables for other business purposes. This is illegal and unreasonable.

Ed Chen, a litigation partner at Yingke US Law Firm’s Los Angeles office who represented the case, said: “Amazon claims that it has zero tolerance for paid positive reviews and punishes third-party sellers accordingly, but ironically, Amazon itself has benefited and profited from such behavior. Now, Amazon is also refusing to pay the plaintiffs and the class members of the alleged class action lawsuit the funds in the seller’s account, which are the property to which the plaintiffs have legal rights.”

Group litigation has a greater chance of success, but the road is blocked by the "Article 3 Agreement"?

Amazon is a giant in the global e-commerce industry. Given its market position, economic strength, and influence, any single seller who sues Amazon will face great pressure. However, the class action system in the United States allows some plaintiffs to file lawsuits on behalf of all the damaged groups as "class representatives", so the sellers whose accounts have been blocked will have a greater chance of winning if they take collective action.

However, as we all know, Amazon’s standard terms and conditions, which sellers click to confirm when they register, include relevant content that prohibits class action lawsuits. The relevant terms and conditions are clearly written in black and white, cutting off the path for sellers to file class action lawsuits. This is also one of the reasons why sellers are hesitant about whether to file a lawsuit together.

In response to this, Yingke's US legal team believes that there are doubts about the validity of such agreement clauses. The US Federal Court of Appeal has denied the validity of the prohibition of class action clauses in specific format clauses in multiple cases.

"We hope that sellers can pool their efforts to jointly promote this class action lawsuit and make Amazon realize that even if some sellers have some degree of misconduct, it does not mean that Amazon has the right to deduct all receivables in the seller's account in a blanket manner without distinguishing the circumstances." Yingke's US legal team said.

Te Xun Intellectual Property Law Firm, the leader of this class action lawsuit, said that in addition to Sopownic, Slaouwo, Deyixun, Cstech, Recoo Direct, Angelbliss and Tudi that have appeared in the indictment, other sellers have joined one after another.

Among them, one seller had one of his main brands blocked, $300,000 frozen, and 5,000 stocks seized. Another seller had 4 brands and 30 accounts blocked at once, and tens of millions of funds frozen.

The account closure and fund freezing had a significant impact on them. One seller said that after his account was blocked, he could only reduce expenses by laying off employees, clearing inventory to reduce losses, and exploring new platforms to find new solutions.

"In order to recover losses and let others know that Chinese sellers are a large group and should not and cannot be unilaterally and excessively punished by the platform now and in the future," said a seller who mentioned the original intention of participating in the class action lawsuit against Amazon.

Good news! Some sellers whose accounts were banned have reached a settlement with Amazon

"Some of the sellers we are working with have successfully reached a settlement with Amazon and have been able to get back most of their frozen funds (the settlement involves confidentiality clauses, so the specific details cannot be disclosed)" said a relevant person in charge of Te Xun Intellectual Property Law Firm excitedly. "Although this is not a real victory for the seller, getting back some of the frozen funds is also a victory for the seller to a certain extent, which is of great significance to the sellers who will sue later."

It is reported that this "victory" did not come easily. "When we were preparing to do this, we had many concerns and great pressure, because no matter where we stand, there will always be positive and negative comments." The person in charge said that when they saw that many of their customers suffered serious economic losses and operations due to the account blocking incident, and even many companies were unable to pay employees' wages and suppliers' payments due to the sudden interruption of cash flow, and the companies had difficulty in maintaining operations, they decided to try to use the resources at hand to take the lead in doing this.

Given that the sellers have suffered significant losses, Texun hopes to reduce the losses of some cross-border sellers as much as possible in this incident and reduce the initial cost of sellers seeking legal means in this incident. The Texun team is responsible for collecting detailed information on the freezing of funds of Chinese cross-border sellers, including specific reasons, amounts and freezing time. The American lawyer team Yingke Law Firm is responsible for studying relevant legal stripes, sorting out and sorting out cases, and confirming the possibility of winning and the appropriate way to sue.

"This lawsuit has also brought certain pressure to the litigation agency team, TeXun Intellectual Property and Yingke Law Firm. This is just a normal cross-border rights protection legal event. I hope everyone can look at it rationally." The person in charge said.

It is reported that in addition to this class action lawsuit, TeXun Intellectual Property Law Firm and Yingke’s US lawyer team are also communicating with Amazon on behalf of individual sellers whose funds have been frozen, and have also filed arbitration against Amazon separately in some cases.

The time lasted for 5 months, and the Ministry of Commerce spoke twice

Since the end of April, the Amazon account ban incident has lasted for more than five months. The cross-border community has gradually calmed down from the initial panic and panic, and has entered a stage where they can look at this matter more rationally.

According to statistics released by the Shenzhen Cross-border E-commerce Association in August, more than 50,000 Chinese sellers were banned from Amazon in more than two months, causing losses estimated to exceed 100 billion yuan. This does not include sellers who are unwilling to register.

This incident triggered turmoil and earthquake in the entire industry. The companies whose accounts were blocked either scaled back their operations or went bankrupt due to the lack of support. A large number of employees were laid off, and the supply chain behind them also faced huge challenges. Orders were canceled or delivery was delayed when the products were about to be delivered.

This has also attracted the attention of relevant national departments. In mid-August, a research team from the Guangdong Provincial Department of Commerce went to Shenzhen

Investigate the details of the impact of the recent Amazon "store closure" incident on cross-border e-commerce companies. The Shenzhen Commerce Bureau assisted the Provincial Department of Commerce in holding a "Cross-border E-commerce Enterprise Symposium". At the same time, on August 5, the Shenzhen Commerce Bureau also issued a notice to encourage strong cross-border e-commerce companies to expand overseas markets through independent station sales channels, and provide 2 million yuan in funding for each project.

The Ministry of Commerce also spoke out twice in response to the Amazon account suspension incident. On September 30, Ministry of Commerce spokesperson Shu Jueting pointed out that the Ministry of Commerce continues to pay attention to the measures taken by some foreign e-commerce platforms against some Chinese platform companies, and has taken positive measures to help and guide companies to respond effectively. It has guided Shenzhen and other places to introduce support measures and provide legal aid; promoted foreign e-commerce platforms to provide follow-up services for Chinese companies; and carried out cross-border e-commerce special training to help companies better familiarize themselves with platform rules.

As early as July 22, Li Xingqian, Director of the Department of Foreign Trade of the Ministry of Commerce, mentioned that enterprises will encounter some risks and challenges when going overseas. The behavior of some sellers was considered to have violated the Amazon platform's "Seller Code of Conduct" and other standard terms, resulting in restrictions on operations. In general, this is a problem that has emerged in the development of new foreign trade formats, a stage of "not adapting to the local environment" and "growing pains."

In conclusion: In the short term, the account suspension has indeed had a significant impact on sellers, causing heavy economic losses, but in the long run it is not all bad. First, it can help more sellers improve their awareness of compliance operations and not try to violate the platform's rules with various "black technologies"; second, it makes sellers realize that they cannot rely too much on the experience of a single platform such as Amazon, and cannot put all their eggs in one basket at the same time, and establish a multi-platform and multi-market business awareness; third, compliant sellers have gained a better business environment; fourth, non-compliant means such as fake orders have suffered a heavy blow, and sellers will focus more on optimizing the supply chain, improving the core competitiveness of products, and building influential brands.

However, for sellers whose accounts have been blocked, the most important thing is to recover their economic losses. As mentioned above, Amazon’s “one-size-fits-all” approach is unreasonable and illegal. If sellers can use legal means to get back their frozen funds and seized inventory, they can try it according to their own situation.

Chinese Amazon sellers who are interested in participating in the joint rights protection, please add the contact administrator of Texun Intellectual Property Class Action: tx88667788

If sellers need to participate in collective rights protection, the list of materials they need to prepare is: store information, company name, contact person, contact information, start time of order brushing, account frozen amount, Amazon notification email for store closure, etc. The template is as follows:

Amazon ban