1

3
AMERICAN ARBITRATION ASSOCIATION
4

5
AMAZON.COM, INC., a Delaware
6 corporation, No. ____________________

7 Claimant,

8 v.

9 TERRANCE LI, an individual,

10 Respondent.

11
AMAZON.COM, INC.’S
12 DEMAND FOR ARBITRATION
13
Amazon.com, Inc. (“Amazon”), for its demand for arbitration, states as follows:
14
I. SUMMARY
15
1. Each day, millions of consumers use Amazon’s websites to assist with their
16
purchasing decisions. In order to make those decisions more informed, Amazon provides
17
customer reviews of products and services available on Amazon. Amazon pioneered
18
customer reviews 20 years ago and is now home to hundreds of millions of unique
19
reviews. Reviews provide a forum for sharing authentic feedback about products and
20
services—positive or negative. Amazon does not remove reviews because they are
21
critical of products; Amazon believes all helpful information can inform its customers’
22
buying decisions. Whether positive, negative, or anywhere in between, Amazon takes the
23
credibility of its customer reviews very seriously.
24
2. One segment of Amazon reviews consists of reader reviews of books,
25
including reviews of books self-published by authors and independent publishers through

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 1 Amazon’s Kindle Direct Publishing (KDP) service and sold by Amazon Digital Services
2 LLC on various Amazon websites. Authors who use this service to publish their books
3 agree to KDP terms and conditions.
4 3. A very small minority of KDP authors attempt to gain an unfair
5 competitive advantage by creating false, misleading, and inauthentic customer reviews for
6 their self-published books sold on Amazon. While small in number, these reviews
7 threaten to undermine the trust that customers, and the vast majority of KDP authors,
8 place in Amazon, thereby tarnishing Amazon’s brand and the Kindle brand. Amazon
9 strictly prohibits any attempt to manipulate customer reviews and actively polices its
10 website to remove false, misleading, and inauthentic reviews. Despite substantial efforts
11 to stamp out the practice, a small number of bad actors continue to endeavor to use
12 inauthentic reviews to boost their sales.
13 4. Since the beginning of 2015, Amazon has filed lawsuits against over 1,000
14 defendants who offered to post fake reviews in exchange for payment. Through these
15 efforts, as well as analysis of Amazon’s own data, Amazon has identified sellers who have
16 paid for fake reviews and taken enforcement action against those sellers such as
17 suspending or blocking their accounts. Using the same techniques, Amazon has identified
18 KDP authors who are engaging in abuse of the Amazon customer review system. This
19 demand for arbitration is a continuation of that strategy and is intended to eliminate the
20 incentives for KDP authors to engage in abuse.
21 5. Respondent Terrance Li is the holder of a KDP user account that publishes
22 books by various authors. Respondent has engaged in an extensive and concerted effort to
23 mislead Amazon’s customers and to manipulate customer reviews for Respondent’s self-
24 published books. Respondent has knowingly violated Amazon’s rules for KDP users, and
25

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 1 has used deception and artifice in an attempt to circumvent Amazon’s investigative and
2 enforcement efforts.
3 6. Respondent sells how-to/learning books across various subjects and under
4 various author names. Amazon has determined that across Respondent’s collection of
5 books, reviews that violate Amazon’s review policies were submitted for at least 39
6 books. For those books, 1,471 of 1,957 submitted reviews on Amazon.com (75%) violate
7 Amazon’s review policies and were removed.
8 7. Amazon brings this arbitration demand to terminate Respondent’s activity
9 on the KDP service and to force disgorgement of Respondent’s ill-gotten gains.
10 8. In this proceeding, Amazon brings claims for violations of §43 of the
11 Lanham Act, 15 U.S.C. §1125(a) (Unfair Competition/False Advertising); violations of
12 the Washington Consumer Protection Act (RCW Ch. 19.86); and breach of contract and
13 violation of Washington common law.
14 II. THE PARTIES
15 9. Amazon is a Delaware corporation with its principal place of business in
16 Seattle, Washington. Amazon owns and operates the Amazon.com website, and
17 equivalent international websites. Amazon has more than 250 million active customers.
18 10. Respondent Terrance Li is an individual who resides in Ontario, Canada.
19 Respondent is the owner and operator of the KDP account known as “Terrance Li” and is
20 responsible for the actions of the various KDP authors of the books published through
21 Respondent’s KDP account.
22 11. Respondent creates or causes to be created fake reviews for books
23 published through Respondent’s KDP account. On one or more occasions, Respondent
24 has agreed to the Kindle Direct Publishing Terms and Conditions (Exhibit 1), and thereby
25 has agreed that any dispute with Amazon will be resolved by binding arbitration

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 1 conducted by the American Arbitration Association (AAA) under AAA rules. In agreeing
2 to the KDP Terms and Conditions, Respondent has affirmatively agreed to the Amazon
3 Community Guidelines (Exhibit 2), and Amazon’s Conditions of Use (Exhibit 3).
4 III. AMAZON’S PRODUCT REVIEW SYSTEM
5 12. Amazon encourages its customers to review products and services
6 available on its websites. Products available through Amazon include millions of books,
7 which also carry customer reviews. These reviews are made available on the detail pages
8 of those books. Consumers rely on this customer feedback to make informed purchasing
9 decisions. Customers trust that these reviews will be honest, helpful, and authentic.
10 13. Each book review comprises the reviewer’s textual comments and a “star
11 rating” that ranges from one star to five stars. Amazon compiles the book reviews,
12 summarizes the compiled star ratings, and publishes those results alongside the advertised
13 book for shoppers to see.
14 14. Amazon prohibits manipulating reviews, as provided in its Community
15 Guidelines, which are part of the KDP Terms and Conditions. Barred conduct includes
16 “[o]ffering compensation or requesting compensation (including free or discounted
17 products) in exchange for creating, modifying, or posting content.” Exhibit 2. The
18 Community Guidelines also state possible consequences for engaging in barred conduct:
19
Any attempt to manipulate Community content or features, including by
20 contributing false, misleading, or inauthentic content, is strictly
prohibited. If you violate our Guidelines, we may restrict your ability to
21 use Community features, remove content, delist related products, or
suspend or terminate your account. If we determine that an Amazon
22 account has been used to engage in any form of misconduct, remittances
and payments may be withheld or permanently forfeited.
23

24 Exhibit 2.

25

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 1 15. Amazon’s Conditions of Use prohibit the misleading of Amazon customers

2 through false reviews or other misleading content, stating that users “may not use a false

3 e-mail address, impersonate any person or entity, or otherwise mislead as to the origin of a
4 card or other content.” Exhibit 3.
5
16. Amazon takes the integrity of its customer reviews very seriously.
6
Amazon has developed sophisticated technologies and protocols to detect and remove
7
false, misleading, and inauthentic reviews from its website. Amazon scours its site for
8

9 fake reviews, removes them when it finds them, and takes enforcement action against

10 reviewer accounts that post fake reviews and the manufacturers, sellers, and authors

11 responsible for those fake reviews.

12
IV. RESPONDENT’S ILLEGAL ACTS
13 17. On or around May 17, 2016, the Respondent registered as the KDP account
14 Terrance Li. Respondent owns and is responsible for the conduct of his KDP account.
15 18. Since joining KDP, Respondent has created or caused to be created fake
16 reviews for books associated with his KDP account. For example, 1,957 reviews have
17 been submitted for 39 how-to/learning books on Amazon.com; Amazon determined at
18 least 1,471 of the 1,957 reviews (75%) were abusive and removed them, with most
19 reviews posted by Amazon reviewer accounts whose characteristics indicate they are not
20 real customers. Amazon warned Respondent in July 2016 and March 2017, but the
21 review abuse has continued.
22 19. At all times, Respondent knew that Amazon’s policies prohibited his
23 activities, and knew and intended that Respondent’s actions would deceive customers.
24 The result of these intentional efforts is the deception of Amazon’s customers and unfair
25 competition with other KDP authors in the Amazon marketplace.

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 FIRST CLAIM FOR RELIEF
1 Federal Unfair Competition (Lanham Act, 15 U.S.C. § 1125(a))
2 20. Amazon incorporates by reference the allegations of each and every one of
3 the preceding paragraphs as though fully set forth herein.
4 21. Respondent made false and misleading statements of fact in the
5 commercial advertisement of e-books sold on the Amazon.com website.
6 22. Those statements deceived or had the capacity to deceive a substantial
7 segment of potential consumers.
8 23. The deception was material, in that it was likely to influence consumers’
9 purchasing decisions.
10 24. Respondent’s acts constitute willful false statements in connection with
11 products and/or services distributed in interstate commerce, in violation of section 43(a) of
12 the Lanham Act, 15 U.S.C. § 1125(a).
13 25. Respondent’s acts have caused irreparable injury to Amazon. The injury to
14 Amazon is and continues to be ongoing and irreparable. An award of monetary damages
15 alone cannot fully compensate Amazon for its injuries and Amazon lacks an adequate
16 remedy at law.
17 26. Amazon is entitled to an injunction against Respondent, as well as all other
18 remedies available under the Lanham Act, including, but not limited to, compensatory
19 damages, treble damages, disgorgement of profits, and costs and attorneys’ fees.
20 SECOND CLAIM FOR RELIEF
Consumer Protection Act (R.C.W. Ch. 19.86)
21
27. Amazon incorporates by reference the allegations of each and every one of
22
the preceding paragraphs as though fully set forth herein.
23
28. Respondent has engaged in unfair and deceptive acts and practices
24
occurring in trade or commerce in violation of the Washington Consumer Protection Act,
25
R.C.W. Ch. 19.86.

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 1 29. Respondent’s actions were injurious to the public interest. The acts were
2 committed in the course of Respondent’s business, and caused the public dissemination of
3 false consumer reviews designed to trick consumers. Respondent’s acts had the capacity
4 to, and did indeed, harm consumers.
5 30. Respondent’s unfair and deceptive business practices have unjustly
6 harmed Amazon and are causing Amazon to suffer damages.
7 31. Amazon is entitled to treble damages and attorneys’ fees, pursuant to
8 R.C.W. 19.86.090.
9 32. As a result of such unfair and deceptive acts and practices, Amazon has
10 also suffered irreparable injury and, unless Respondent is enjoined from such unfair
11 competition, will continue to suffer irreparable injury, whereby Amazon has no adequate
12 remedy at law.
THIRD CLAIM FOR RELIEF
13 Breach of Contract
14 33. Amazon incorporates by reference the allegations of each and every one of
15 the preceding paragraphs as though fully set forth herein.
16 34. Respondent established one or more KDP accounts and has agreed to
17 Amazon’s Community Guidelines and Conditions of Use.
18 35. Respondent’s actions constitute material breaches of Respondent’s
19 contractual obligations to Amazon, as a result of which Amazon has been damaged in an
20 amount to be proven at trial.
21 36. Respondent’s acts have caused irreparable injury to Amazon. The injury to
22 Amazon is and continues to be ongoing and irreparable. An award of monetary damages
23 alone cannot fully compensate Amazon for its injuries and Amazon lacks an adequate
24 remedy at law. Amazon is entitled to an injunction against Respondent.
25

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 FOURTH CLAIM FOR RELIEF
1 Unjust Enrichment/Restitution
2 37. Amazon incorporates by reference the allegations of each and every one of
3 the preceding paragraphs as though fully set forth herein.
4 38. Respondent unjustly received benefits at Amazon’s expense through
5 Respondent’s wrongful conduct, including their interference with Amazon’s business
6 relationships and other unfair business practices. Respondent continues to unjustly retain
7 these benefits at Amazon’s expense. It would be unjust for Respondent to retain any
8 value Respondent obtained as a result of Respondent’s wrongful conduct.
9 39. Amazon is entitled to the establishment of a constructive trust consisting of
10 the benefit conferred upon Respondent by the revenues derived from Respondent’s
11 wrongful conduct at Amazon’s expense, and all profits derived from that wrongful
12 conduct. Amazon is further entitled to full restitution of all amounts in which Respondent
13 has been unjustly enriched at Amazon’s expense.
14 REQUESTED HEARING LOCATION
15 40. Amazon respectfully requests a hearing in Seattle, Washington, or at
16 another mutually agreed location.
17 PRAYER FOR RELIEF
18 WHEREFORE, Amazon respectfully requests judgment as follows:
19 1. That the Arbitrator issue permanent and injunctive relief against the
20 Respondent and that Respondent, Respondent’ officers, agents, employees,
21 representatives, successors and assigns, and all others in active concert or
22 participation with Respondent be enjoined from:
23 (a) selling products on any of Amazon’s websites;
24 (b) opening any Amazon accounts;
25 (c) accessing Amazon’s services in any manner whatsoever; and

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 1 (d) assisting, aiding or abetting any other person or business entity in
2 engaging or performing any of the activities referred to in subparagraphs (a)
3 through (c) above.
4 2. That the Arbitrator enter an Order declaring that Respondent hold in trust,
5 as constructive trustees for the benefit of Amazon, Respondent’s illegal profits gained
6 from manipulating reviews;
7 3. That the Arbitrator enter an Order instructing Respondent to pay Amazon’s
8 general, special, actual and statutory damages, including treble damages pursuant to
9 R.C.W. Ch. 19.86, in an amount up to $98,056.51;
10 4. That the Arbitrator Order Respondent to pay Amazon both the cost of this
11 action and attorneys’ fees incurred in prosecuting this action; and
12 5. That the Arbitrator grant Amazon such additional and further relief as is
13 just and proper.
14
DATED this 6th day of September, 2017.
15
K&L GATES LLP
16

17 By /s/ David A. Bateman

David A. Bateman, WSBA # 14262
18 Raina V. Wagner, WSBA # 45701
925 Fourth Ave., Suite 2900
19 Seattle, WA 98104
Tel: (206) 370-6682
20 Fax: (206) 370-6013
Email: david.bateman@klgates.com
21 Email: raina.wagner@klgates.com
22 Attorneys for Claimant
Amazon.com, Inc.
23

24

25

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