Now also Frankfurt Regional Court: Amazon abuses its market power by blocking accounts for no reason

After the Regional Court of Munich I made the start about a year ago, the Regional Court of Frankfurt has now also decided in two preliminary injunctions from December 2021 that Amazon must immediately lift the blocks on seller accounts (Das hat Amazon auch getan, siehe Update unten.).

Amazon had accused the retailers of manipulating customer reviews for its products without providing any further justification. The allegations could not be verified due to a lack of relevant information.

Numerous courts have already ruled that Amazon retailers are wrong to block goods. What is special is that the courts are increasingly focussing on the abuse of a dominant market position.

Amazon blocks seller account and deletes all listings

The applicants were registered as sellers on Amazon and generated significant sales there. At the beginning of December 2021, the affected sellers each received an email informing them that their Amazon.de seller account had been deactivated and all offers had been removed from the website.

Amazon did not give a comprehensible reason for the blocking

The reason given by Amazon was that the applicants had ‘manipulated’ customer reviews for their products. The reviews in question were not disclosed. As a result, the claimants were no longer able to access their account without restriction, they could not post any offers and could not access the credit to which they were entitled. Every day, they lost thousands of euros in sales without being able to justify their actions to Amazon.

Regional Court Frankfurt a.M. orders immediate unblocking

After an out-of-court request to immediately reactivate the applicants and restore the deleted offers was unsuccessful, the Regional Court of Frankfurt a.M. issued the requested preliminary injunctions on 6 December 2021, case no. 2-03 O 453/21 and on 16 December 2021, case no. 2-06 O 347/21.

Accordingly, Amazon must refrain from deactivating the applicant’s Amazon seller account or removing offers from the Amazon.de website without justification and without the opportunity to comment, subject to a fine of up to € 250,000.00 or imprisonment for up to 6 months.

The value in dispute was set at € 100,000 in each case by the Frankfurt Regional Court. The decisions are not final and can be appealed. Amazon also has the option of conducting proceedings on the merits.

Drumbeat: abuse of a dominant market position

After several regional courts have already established the illegality of unmediated account blocking by Amazon – including on the basis of corresponding applications by LHR – and have prohibited this by means of a temporary injunction, the Frankfurt Regional Court has now also followed suit with two decisions.

It is particularly pleasing that Amazon’s tactic of taking the position that German courts are not competent to rule on account freezes against the background of Luxembourg as the chosen location for tax and litigation purposes no longer works.

Amazon liable for loss of sales

The next step for sellers is to claim compensation from Amazon for lost sales during the period of unauthorised blocking. Of course, the seller must take into account any costs saved.

Lawyer Thomas Herro, specialised lawyer for intellectual property law and partner of the law firm LHR:

‘For us, it was only a matter of time before Amazon’s dominant market position could be conclusively demonstrated or proven in court and retailers would have an effective legal means of defending themselves against arbitrary blocking under antitrust law. While Amazon’s motivation to keep unreliable retailers or sellers who manipulate product descriptions or reviews off the platform is understandable, it must also go without saying that such serious accusations should not be made out of the blue and that retailers should not be blocked without a comprehensible reason. Amazon will now have to pay for the lost profits.’

Update

Even a litigious company like Amazon must ultimately abide by the law and an injunction issued by a German court. After the injunctions were successfully served, Amazon therefore dutifully activated the retailers and enabled the payment of the withheld credit balance of approximately €185,000 and approximately €66,000 respectively.

Both accounts are still activated today. Since reactivation, the retailers have been able to continue selling their products and have already realised sales of around € 800,000 in one case and around € 100,000 in the other. These sales are currently being paid out to the retailers again on an ongoing basis. Details here: Amazon responds to injunctions, unblocks seller accounts and releases frozen funds.

(Disclosure: Our law firm represented the applicants).