Amazon accounts for 40% of U.S. e-commerce revenue. While the online retail giant’s dominance has continued to grow for more than two decades, the way Amazon operates its marketplace has changed significantly.
In 2010, third-party sellers (independent merchants selling products on Amazon) were responsible for roughly one-third of all units sold on the platform 62%, or nearly two-thirds, are attributed to third-party sellers. For many e-commerce brands, Amazon has become a central sales channel rather than a supplemental revenue stream
As the leading e-commerce marketplace, Amazon faces the ongoing challenge of policing counterfeit products and fraudulent sellers. Amazon has reported investing more than $1 billion in 2024 in AI innovation to protect customers and sellers from counterfeits and fraud. Amazon claims that these controls block more than 99% of suspected cases without requiring action from affected brands.
Amazon uses AI systems to detect counterfeit products and enforce seller policies, protecting customers and compliant sellers. However, automated enforcement and tightened requirements affect all sellers on the platform. Listings or accounts can be suspended unexpectedly, even for sellers following the rules. Some sellers unknowingly violate guidelines, while automated systems incorrectly flag others. With third-party seller revenue exceeding $150 billion annually, occasional false positives are an inherent part of operations.
Rosenbaum & Segall, P.C., a law firm focused on compliance issues affecting Amazon sellers, examines how enforcement changes are affecting third-party merchants.
How Enforcement Affects Sellers
Third-party sellers have always been susceptible to Amazon’s enforcement actions, but the growth of automated compliance systems requires sellers to be more alert than ever. Since Amazon does not release public data on account suspensions, it’s difficult to assess how widespread enforcement actions are, but independent surveys offer partial insight, though results vary by methodology and sample size. Entresource reports that its survey of more than 300 sellers found that 22% have had their accounts suspended at least once. And a separate SmartScout survey of 325 sellers revealed that 35% of sellers have experienced an account suspension.
Another challenge for sellers is that the range of possible noncompliance issues has expanded. Where enforcement actions were once mostly intellectual property disputes from brand owners, sellers now face increased scrutiny over product safety documentation, regulatory certificates, and listing language that Amazon’s automated systems flag as potentially violating Food and Drug Administration (FDA) or consumer safety rules.
