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DEMAND FOR ARBITRATION - 1

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K&L GATES LLP 925 FOURTH AVENUE SUITE 2900 SEATTLE, WASHINGTON 98104-1158 TELEPHONE: (206) 623-7580 FACSIMILE:

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AMERICAN ARBITRATION ASSOCIATION

AMAZON.COM, INC., a Delaware corporation, Claimant, v. TERRANCE LI, an individual, Respondent. No. ____________________

AMAZON.COM, INC.’S DEMAND FOR ARBITRATION

Amazon.com, Inc. (“Amazon”), for its demand for arbitration, states as follows:

I. SUMMARY

1.

Each day, millions of consumers use Amazon’s websites to assist with their purchasing decisions. In order to make those decisions more informed, Amazon provides customer reviews of products and services available on Amazon. Amazon pioneered customer reviews 20 years ago and is now home to hundreds of millions of unique reviews. Reviews provide a forum for sharing authentic feedback about products and services—positive or negative. Amazon does not remove reviews because they are critical of products; Amazon believes all helpful information can inform its customers’ buying decisions. Whether positive, negative, or anywhere in between, Amazon takes the credibility of its customer reviews very seriously. 2.

One segment of Amazon reviews consists of reader reviews of books, including reviews of books self-published by authors and independent publishers through


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Amazon’s Kindle Direct Publishing (KDP) service and sold by Amazon Digital Services LLC on various Amazon websites. Authors who use this service to publish their books agree to KDP terms and conditions. 3.

A very small minority of KDP authors attempt to gain an unfair competitive advantage by creating false, misleading, and inauthentic customer reviews for their self-published books sold on Amazon. While small in number, these reviews threaten to undermine the trust that customers, and the vast majority of KDP authors, place in Amazon, thereby tarnishing Amazon’s brand and the Kindle brand. Amazon strictly prohibits any attempt to manipulate customer reviews and actively polices its website to remove false, misleading, and inauthentic reviews. Despite substantial efforts to stamp out the practice, a small number of bad actors continue to endeavor to use inauthentic reviews to boost their sales. 4.

Since the beginning of 2015, Amazon has filed lawsuits against over 1,000 defendants who offered to post fake reviews in exchange for payment. Through these efforts, as well as analysis of Amazon’s own data, Amazon has identified sellers who have paid for fake reviews and taken enforcement action against those sellers such as suspending or blocking their accounts. Using the same techniques, Amazon has identified KDP authors who are engaging in abuse of the Amazon customer review system. This demand for arbitration is a continuation of that strategy and is intended to eliminate the incentives for KDP authors to engage in abuse. 5.

Respondent Terrance Li is the holder of a KDP user account that publishes books by various authors. Respondent has engaged in an extensive and concerted effort to mislead Amazon’s customers and to manipulate customer reviews for Respondent’s self- published books. Respondent has knowingly violated Amazon’s rules for KDP users, and


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has used deception and artifice in an attempt to circumvent Amazon’s investigative and enforcement efforts. 6.

Respondent sells how-to/learning books across various subjects and under various author names. Amazon has determined that across Respondent’s collection of books, reviews that violate Amazon’s review policies were submitted for at least 39 books. For those books, 1,471 of 1,957 submitted reviews on Amazon.com (75%) violate Amazon’s review policies and were removed. 7.

Amazon brings this arbitration demand to terminate Respondent’s activity on the KDP service and to force disgorgement of Respondent’s ill-gotten gains. 8.

In this proceeding, Amazon brings claims for violations of §43 of the Lanham Act, 15 U.S.C. §1125(a) (Unfair Competition/False Advertising); violations of the Washington Consumer Protection Act (RCW Ch. 19.86); and breach of contract and violation of Washington common law.

II. THE PARTIES

9.

Amazon is a Delaware corporation with its principal place of business in Seattle, Washington. Amazon owns and operates the Amazon.com website, and equivalent international websites. Amazon has more than 250 million active customers. 10.

Respondent Terrance Li is an individual who resides in Ontario, Canada. Respondent is the owner and operator of the KDP account known as “Terrance Li” and is responsible for the actions of the various KDP authors of the books published through Respondent’s KDP account. 11.

Respondent creates or causes to be created fake reviews for books published through Respondent’s KDP account. On one or more occasions, Respondent has agreed to the Kindle Direct Publishing Terms and Conditions (Exhibit 1), and thereby has agreed that any dispute with Amazon will be resolved by binding arbitration