Can I Sue a Large Online Seller/Retailer Company?
Yes, you may be able to sue certain large online retailers, but you are bound by the terms of their online user agreement. Those agreements vary substantially from site to site.
At least one allows you to freely sue, but only in a particular county of a particular state. Others allow you to bring a case on your own behalf in your local small claims court, but you must submit larger claims to a process called arbitration. At least one requires arbitration, but you can opt out of arbitration if you notify them within 30 days.
A contracts attorney could help you better understand the terms of your user agreement — as you will see, those agreements can be quirky — and give you legal advice about whether you should seek legal relief. However, you may be able to get a refund or otherwise resolve your dispute informally. So try that first.
E-Commerce Is Big Business
In the United States, e-commerce is huge. In the third quarter of 2021 alone, the estimated U.S. e-commerce retail sales totaled about $204.6 billion. Although Amazon has by far the largest market share, four online sellers are responsible, in total, for more than half of online retail sales. They are:
- Amazon (41% of the market)
- Walmart (6.6% of the market)
- eBay (4.2% of the market)
- Apple (4% of the market)
Each online retailer is a little different in terms of how they operate and the way you resolve a dispute with them. We will focus on these four largest. They each have specific requirements.
Returns and Refunds
At the outset, you should consider two points common to all e-commerce sites. The first: before you go looking to bring legal action, consider trying to work out your dispute informally. Each site has a return policy and claims resolution processes that may help you get a refund.
If you paid by credit card, you may be able to get your credit card company to start a fraud investigation and reverse the charges if you don't receive your item. In either case, you may be able to work things out without having to pay a lawyer to step in.
The second point is the subject of bad reviews. You may be a seller on an e-commerce platform and get bad reviews. You do not have the right to sue the platform for bad reviews under Section 230 of the Telecommunications Decency Act of 1996. Amazon, Walmart, eBay, and Apple are not legally responsible for third-party reviews, whether those bad reviews are truthful or not.
You may be able to sue the reviewer (if you can find them), but you need to be careful. Certain states, including California, have laws that punish you if you are a seller and retaliate against a reviewer. And the platform may be upset with you as well and remove your account. Before you choose to go to the time and expense of suing the customer, strongly consider a brief consultation with an attorney to see if it's worth the effort.
Let's start with Amazon. Amazon began as an online bookstore. Now you can buy virtually anything under the sun through Amazon.
As of December 2021, Amazon had a market cap of about $1.8 trillion. It's been reported that in 2020, about 65% of the U.S. population visited Amazon's website at least once per month, and that there were more than 2.5 million third-party sellers on the platform.
If You're a Buyer
You can buy from Amazon directly or one of those third-party sellers on its site. If you buy from Amazon, you are bound by the user agreement you signed up for when you opened your Amazon account.
If you have a dispute with Amazon, you can sue it, but only in a court in King County, Washington. And you waive any right to a jury trial. That makes filing a lawsuit in most cases impractical at best — a lawsuit could cost a lot more than the price of the item.
If you have a dispute with a third-party seller, you can sue it for breach of contract if you do not receive your item or receive an item that is significantly different from what is depicted (abbreviated “SNAD").
The biggest problem is finding them and, if you can find them, bringing your claim in a court with power over them. The only place you may be able to sue is in the seller's home state. That may be inconvenient or prohibitively expensive. Make sure you check with a contract attorney if you are planning on taking action against a third-party seller.
If You're a Seller
A third-party seller may have a dispute with Amazon. They are bound by the terms of Amazon's Services Business Solutions Agreement. According to those terms, they can sue Amazon in small claims court in King County, Washington. Otherwise, they have to submit their dispute to arbitration.
Arbitration is a process by which the parties to a dispute hire a neutral third party (an arbitrator) to resolve it without going to court. That person hears both sides of the dispute and makes a binding decision. You generally cannot appeal an arbitrator's award.
Some lawyers like arbitration, some don't. Although the process can be faster, cheaper, and simpler than a court proceeding, that is not always the case. Arbitrations can be just as lengthy and expensive as full-blown jury trials.
If you find yourself thinking about pursuing arbitration (especially against a company as big as Amazon), you should strongly consider getting an experienced consumer protection attorney to represent you.
Walmart differs from Amazon. Walmart doesn't have third-party sellers. So the user agreement focuses only on buyers.
You can sue Walmart, but only on your own behalf — you cannot group your claims with those of other people in what is called a class action lawsuit — in small claims court. You have to submit larger claims to binding arbitration.
You can't buy eBay products, eBay doesn't make any. Rather, eBay is an online auction site and an online marketplace. There are only third-party sellers. Its user agreement for your eBay account is clear that a buyer's contract is between the buyer and the seller, and that eBay is not responsible for any harm that results from an eBay transaction.
Nonetheless, you may have a claim against eBay. If you do, you can sue it on your own behalf in small claims court in your home state. You must submit larger claims to arbitration.
One of the differences with eBay, however, is that the user agreement lets you opt out of arbitration if you notify eBay of your decision to do so within 30 days after you accept the user agreement for the first time. That means you would be able to file larger claims in court, so long as you follow eBay's notification procedure.
You may not need to take action against eBay, however. Many eBay transactions are handled through PayPal. According to PayPal's Buyer Protection Program for your PayPal account, you may be able to get a refund as long as you qualify for the program and follow the proper procedures. So before you take action against eBay, you may want to see if you can get your money back through PayPal.
Apple makes and sells its own products. There are no third-party sellers on Apple's site. You can purchase Apple products (iPhones, iPads, etc.) at its stores or online. Apple also sells a lot of software and media through iTunes and the App Store.
Apple's user agreement is very specific. You can sue Apple, but only in a court in Santa Clara County, California. You only have one year under the agreement in which to bring your claim.
Before you go to court, however, the user agreement requires you to informally try to work out your dispute for 30 days. Then you may, but are not required, to try to resolve your claims through a process known as mediation. In mediation, you hire a neutral third party (a mediator) who tries to help the parties come to a satisfactory resolution.
Mediation is different from arbitration. A mediator may, but not always, review submissions by the parties, talk with them, and come to a decision. Sometimes they just negotiate between the parties (often with them in separate rooms). Unlike arbitration, however, the mediator's decision is not binding.
Consider Consulting a Lawyer
As you can see, whether you can sue an online marketplace, auction, seller, or retailer depends on your user agreement, and the user agreements differ (in some cases substantially) from site to site. If you have a dispute with an online seller, you need to carefully review your user agreement. They can be complicated.
You should consider bringing in a contract attorney. An attorney can help you better understand your user agreement and represent you if you need to arbitrate your claims. Having an attorney in your corner also gives you leverage, even if you are just trying to work out your dispute informally.
Keep in mind that you may need to bring legal action within a particular period of time under the user agreement or the state's statute of limitations. So don't wait — act quickly.