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Amazon takes on two new lawsuits

Today, we’re serving you the hottest teas.

But, before delving into that, did you know that almost 50% of our subscribers want to read Amazon success stories and cases from us? Do you agree with this? Let us know your thoughts by answering this survey and we might just serve you exactly that. 😉

POST OF THE WEEK

BLACK MARKET

Amazon’s continually serving its sellers and customers. But they’re also busy tending to its two new lawsuits. The Verge reported the details, and if you’ve been following the drama with the FTC, some of these might ring a bell. 🔔

Lawsuit #1: The Prime trap

  • Allegation: Amazon uses deceptive design tricks, or "dark patterns," to complicate their Prime subscription cancellation process. This tricks consumers into staying subscribed longer than they intend to, a clear violation of the Consumer Fraud Act.

If this sounds familiar, it’s because the FTC already took action against Amazon over the same dark pattern issue back in June.

Lawsuit #2: Monopoly moves

  • Allegations: Amazon maintains monopoly status by imposing "no offering lower prices elsewhere" agreements with third-party sellers. This violates the Breach of Uniform State Antitrust Act.

The kind of deal mentioned, known as a “most favored nation” clause, has been under fire in other states, too. The District of Columbia and California have taken action against it, but the former's case was thrown out. 🗑️

Lawsuit #2.1: The Buy Box controversy

  • Allegations: The second lawsuit also aims at the tech giant's Buy Box algorithm. Mayes claims that it unfairly favors Amazon's products or those from FBA sellers. This practice misleads consumers into believing they are getting the best price. In reality, customers might overpay because Amazon prioritizes listings that generate higher fees, a possible violation of the Consumer Fraud Act.

This echoes the FTC's antitrust case against Amazon, supported by multiple state AGs. It highlights how such control can lead to anti-competitive behavior and consumer deception.

Amazon fires back

Amazon spokesperson Tim Doyle criticized the Arizona AG for filing lawsuits without reviewing Amazon's documents, calling the allegations a “fundamental misunderstanding and mischaracterization” of their business practices.

Doyle emphasized that Amazon's operations aim to offer fair prices and services for consumers and sellers, contrary to the lawsuits' claims. ❎

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BITES OF THE WEEK

HOT TOPIC

TikTok ban in the US concerns some sellers

ICYDK, TikTok is facing several issues: from data privacy risks to the spread of misinformation. Now, there’s another significant problem: a possible ban in the U.S. 🚫

A bill passed by the U.S. Senate and signed into law by President Biden in late April 2024 could ban TikTok if its owner, ByteDance, doesn’t sell the app within the next year. 

However, according to Reuters, some sellers are worried about the impact of this bill.

Why do some sellers oppose the ban?

  • Business growth: TikTok has helped many small businesses grow rapidly. For example, sellers Paul and Lynda Tran saw their skincare brand, Love & Pebble, go viral and sell out their products.
  • Unique algorithm: TikTok’s algorithm allows small businesses to reach large audiences quickly. Unlike other platforms, it doesn’t require a huge following to go viral.
  • Community engagement: TikTok users not only buy products but also share them with others. This helps boost sales and brand visibility.
  • Sales platform: The launch of TikTok Shop in 2023 has enabled sellers to sell directly within the app, which helps increase their sales.
  • Lack of alternatives: Other platforms like Instagram and Facebook have not yet provided the same level of opportunity for small businesses. However, Meta's recent updates to Instagram aim to improve the experience and performance of small content creators.

🤹‍♂️ Finding the perfect balance

The question is: can we protect our digital borders without crushing the hopes of small business owners? Let's hope for a solution that balances both: keeping our data safe while leaving the door open for small businesses to thrive. 🌱

ACTIONABLE ADVICE

4 steps to a sustainable ecommerce business

Consumers nowadays are more conscious of their buying choices. Aside from the products themselves, they’re making considerable efforts to choose “sustainable” businesses.

In a world full of single-use plastics, how can you practice sustainability The Entrepreneur shares some ways:

  • Demand forecasting

The main problem in business is making more but selling less. Minimize overproduction by predicting product demand. You can use AI to calculate these numbers for you!

  • Sustainable packaging

Choose biodegradable or reusable packaging solutions. Although some eco-friendly packaging materials like honeycomb paper packaging cost more than those made from plastic, it’s worth investing in this in the long run.

This way, you can plug that you’re a sustainable brand without being accused of “greenwashing.”

If you don’t have the budget to buy eco-friendly packaging, you can always reuse or recycle what you currently have! Don’t throw out box packages or tags on your bulk purchases. These come in handy when packing orders.

Author : SellerBites
Faith began working on SellerBites in 2021, a weekly newsletter that provides sellers with the latest news and updates in FBA. With first-hand experience in managing various seller and vendor accounts, she understands what sellers face on this platform. Her background led to the conception of SellerBites, which main goal is to help people become better, more informed entrepreneurs in the Amazon marketplace.
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