UK Amazon sellers sue over millions in frozen revenues

Amazon sellers in the UK are set to initiate legal proceedings against the e-commerce giant, alleging that Amazon has unlawfully frozen tens of millions of pounds in revenue owed to them. This action follows claims from numerous sellers that crucial sales proceeds, in some cases as high as GBP £300,000 per seller, have been unjustly withheld by Amazon, threatening their business operations.

The legal case, spearheaded by the law firm Rosenblatt, seeks to secure compensation for the affected sellers and compel Amazon to release the frozen funds. Rosenblatt is encouraging other sellers experiencing similar issues to join the legal challenge, claiming the freezes often occur on unfounded grounds, such as administrative updates like VAT information.

Data from Amazon indicates that approximately 100,000 sellers operate within its UK marketplace, representing a range from large enterprises to independent traders. Hundreds of sellers have reportedly turned to Amazon's Seller Central forums and other online platforms to express their grievances, with some considering bankruptcy or expressing severe distress, including thoughts of self-harm, due to the prolonged withholding of funds.

Reports indicate that despite submitting substantial documentation in compliance with Amazon's requests — including invoices, supplier details, and sales data — many sellers continue to face barriers in re-establishing access to their proceeds. This situation has drawn comparisons to the Post Office scandal, where systemic issues left numerous individuals embroiled in lengthy and frustrating appeals processes.

A Rosenblatt client, who chose to remain anonymous, shared their frustrations: "I've been pleading with Amazon for nearly 18 months to unfreeze my funds. We had been a seller on Amazon for almost 10 years, and this is the second time they've done this to us. I went above and beyond to provide them with invoices, supplier and buyer information, item descriptions, and quantities, yet I am still waiting to receive my money. It's been a humiliating process. In the end we were forced to take legal action, but with Rosenblatt's help, I'm finally close to recovering my funds. We work incredibly hard as sellers to meet all of Amazon's criteria and standards, but they treat us like second-class citizens-ignoring us and sending automated emails."

Dean Nicholls, a partner at Rosenblatt representing the sellers, highlighted the alleged infractions of Amazon's agreements with its sellers. "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. 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."

Efforts to address these concerns were previously elevated by Kevin Hollinrake MP, former enterprise minister, who spotlighted the issue earlier in 2024. Despite this, sellers continue to report challenges and have seen little progress towards resolving the financial stasis imposed upon them by Amazon.

Amazon's extensive UK sales, surpassing GBP £25 billion in 2023, are viewed against the backdrop of these sellers' grievances. For Amazon's sellers, who often operate on slim margins and rely heavily on cash flow, access to these frozen funds is critical not only for sustaining their businesses but also for ensuring the livelihood of their families.