A jury in Seattle awarded Amazon $3.6 million after the tech giant sued a vendor for manipulating its automated ordering system and refusing to accept return of its own products.
Amazon filed a lawsuit in the U.S. District Court for Western Washington last month against Beautyko, a vendor that sold exercise apparel and equipment to Amazon.
In the lawsuit, which you can read in full below, Amazon accused Beautyko of not only selling physically identical products with different names through various vendor accounts, but selling those products in multi-pack sizes that were designed to jam Amazon’s system and were “unreasonable for Amazon to then sell to Amazon retail customers.”
Amazon began investigating after it noticed a big increase of Beautyko inventory without corresponding sales, according to the lawsuit, which noted that Beautyko “spent months testing the parameters of Amazon’s automated purchasing system before flooding Amazon with inventory.”
After it uncovered the manipulation, Amazon contacted Beautyko, which refused to accept a return. Amazon was forced to liquidate and incurred damages of $4 million as a result.
“Amazon has zero tolerance for fraud,” Amazon said in a statement provided to GeekWire. “Amazon is investing heavily in protecting the integrity of the Amazon marketplace for consumers and sellers. Among other measures, we take independent legal action against bad actors, and we will continue to do so. Amazon is constantly innovating on behalf of consumers and sellers to ensure that they can buy and sell with confidence on Amazon.”
Amazon was represented by Stoel Rives. You can read the lawsuit below: