Amazon Business Solutions Agreement Allowing Confiscation of Seller Funds Again Stricken as Unenforceable in Three Cases Against Chinese Sellers

Amazon Sellers Attorney, a lawyer-supervised suspension appeal service, announced today that three arbitrators sitting in three different states in arbitrations against Amazon.com (AMZN) have stricken section 2 of Amazon's Business Solutions Agreement, which allows Amazon to hold funds indefinitely if they suspect the third-party seller sold inauthentic products, holding that it is not enforceable and ordered Amazon to release the third-party seller's funds.

In an arbitration against Amazon.com, LLC brought by Dongguanshi Likaixiao Technology Co., Ltd., an ex-judge sitting as an arbitrator in Florida ruled that section 2 of the BSA imposed a penalty and was an unenforceable liquidated damages clause. The judge also ruled that failure to submit to an in-person video verification interview by Amazon was not a condition to release of the seller's sales proceeds being held by Amazon, and that the seller was entitled to its sales proceeds notwithstanding the fact that it breached the BSA by committing review manipulation, which is against Amazon's policies. The judge awarded the seller $499,858.47 in damages.

“The Dongguanshi Likaixiao case is a landmark achievement, as it clearly distinguishes other cases in which arbitrators ruled erroneously in favor of Amazon,” said Kenneth Eade, co-counsel. “I commend my co-counsel Julie Guo for an excellent job on this case.”

On March 15, 2023, in the case of Shenzhen Haipa Technology Co., Ltd. vs. Amazon.com LLC, an arbitrator sitting in Tennessee ruled that section 2 of the BSA was an unenforceable penalty clause in another reivew manipulation case. The arbitrator also struck the clause as unconscionable, and held that the seller was entitled to its proceeds notwithstanding its breach of the BSA. The award was for $342,773.02, with interest from the date of account deactivation.

In the largest of the three cases, Shenzhen Sanyxiang E Commerce Co., Ltd. vs. Amazon.com LLC, an arbitrator in Texas ordered Amazon to disburse $790,196.61 in seller proceeds, ruling that Amazon breached its duties under the BSA to distribute the seller's proceeds, that the verification of the seller's identity in an in-person video verification procedure was not a condition to the release of those funds, and that section 2 of the BSA was not a valid liquidated damages clause.

About Amazon Sellers Attorney

Amazon Sellers Attorney is an Amazon appeal service, supervised by lawyers, which serves third-party sellers worldwide with issues of suspension of their Amazon seller accounts and deactivation of listings through its website at www.amazonsellers.attorney. The firm provides 24-hour service to its customers by live chat, telephone, and email, and free appeal consultations. Its current supervising attorney, Kenneth Eade, represented the above-referenced sellers at co-counsel with Julie Guo, of JS Law, New York, after each Chinese-based seller had lost their appeals for the reinstatement of its Amazon seller account and restoration of sales proceeds.

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