Legal requirements vary

The lawsuits UsableNet tracked involve the 1990 Americans With Disabilities Act (ADA). Different courts adopted various interpretations of the law, but the general consensus under the ADA and many state and local laws is that ecommerce websites must be accessible to users with disabilities, Tim Springer, CEO of digital accessibility solutions company Level Access, said in an interview. 

Blind customers who use screen readers to access the web bring the majority of these lawsuits, UsableNet says, but they also include people with auditory disabilities who file lawsuits over videos that lack captions.

Lawsuits are up, but things are slowing down

There were more ADA ecommerce lawsuits in 2022 than in any of the four previous years, UsableNet found. Plaintiffs filed about 100 lawsuits each week, totaling 4,061, more than 70 cases per week. That number roughly kept pace with 2021, which recorded just slightly fewer with 4,011 cases. Filings seem to have leveled off after larger jumps in 2019, 2020, and 2021.

Data courtesy of UsableNet

More than 600 lawsuits in 2022, about 19% of total filings, named companies that were previously named in other ADA-related lawsuits. Sometimes the same plaintiff files a lawsuit about an ecommerce website and a second about the accompanying app, sometimes the suits are from another plaintiff, and sometimes they are against sister brands under the same parent company.

Ecommerce companies are by far the biggest risk for these lawsuits, amounting to 77% of cases, UsableNet found. The food service industry was in a distant second place, at 8% of cases.

Lawsuits target big and small retailers

The biggest ecommerce players face the most lawsuits, but retailers of all sizes are at risk, according to UsableNet. Lawsuits against companies with revenue of less than $50 million per year are on the rise, though they still make up less than one-third of total filings.

Many of the largest ecommerce retailers have already been the subjects of lawsuits and now have accessibility programs. That means plaintiffs have moved on to smaller ecommerce firms that don’t have those policies in place yet, UsableNet reported. The pandemic also pushed retailers to conduct more business online, so there are more companies to file potential lawsuits against.

Big companies are still the most at risk

The biggest ecommerce retailers remain the most likely recipients of lawsuits, according to UsableNet’s data. 20% of Digital Commerce 360’s Top 500 online retailers in 2022 were named in ADA lawsuits in 2022, and 78% of them, 391, were named in ADA digital lawsuits since 2018. Gap (No. 19), Zola (No. 326), Barnes and Noble (No. 109), and Goop (No. 156) were each named in ADA lawsuits in 2022.

Larger companies have an outsized risk of lawsuits because they tend to be more complex, with frequently changing code, and often have a physical location that makes more accessibility requirements apply, per UsableNet.

A holistic approach is best

Making an ecommerce website truly accessible is “more of an art than a science,” Level Access’ Springer told Digital Commerce 360. There’s a misconception among retailers that there’s an exact set of technical requirements that companies can meet to become totally accessible, Springer said, but that’s often not the case. 

This plays out in the data, too. Some retailers use accessibility widgets to outsource making websites accessible, but that’s no guarantee that it works, or that they are safe from lawsuits. 575 of web accessibility lawsuits in 2022 named businesses using widgets, a 36% increase over 2021.

Springer says the solution must be both technical and human. Businesses will often “only get the bare minimum by focusing on compliance with the law,” he said. Instead, retailers should make a genuine effort to make a website as accessible as possible, with a goal of usability rather than simply complying with the law. 

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In a letter dated Feb. 9, Republican Bill Cassidy of Louisiana and Democrats Elizabeth Warren of Massachusetts and Sheldon Whitehouse of Rhode Island sought details about the company’s procurement process and its links to Xinjiang, a region of China whose products are banned for import into the U.S. by federal law. That law designates goods from the region to be products of forced labor — a designation the Chinese government has disputed. Xinjiang has become infamous for its mistreatment of Uyghur Muslims. The letter requested a response within 30 days.

Letter cites Bloomberg report about Shein forced labor

Shein told Bloomberg in an emailed statement Feb. 9 that it has “zero tolerance against forced labor.”

The congressional letter to CEO Xu Yangtian cites a November Bloomberg report that used laboratory testing to determine that garments ordered from Shein on two occasions last year were made of cotton from Xinjiang. At the time, Shein didn’t dispute Bloomberg’s test results or say whether it uses cotton from the region. But it said it takes steps in all its global markets “to ensure we comply with local laws and regulations.”

The senators’ letter asked Shein to provide details about that process, as well as how it ensures that none of the cotton it sends to the U.S. originates in Xinjiang.

Shein said it had engaged third-party agencies to conduct regular, unannounced audits of supplier facilities.

“Shein requires that our suppliers purchase cotton from Australia, Brazil, India, U.S. and other approved regions,” the statement said. “We have built and implemented a traceability management system that gives visibility to the origins of cotton throughout the entire production process.”

Shein Group Ltd. ranks No. 36 in the 2022 Asia Database, Digital Commerce 360’s rankings of the largest e-retailers in the region by web sales.

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A group of Chinese cyber-criminals allegedly manages the illicit network of more than 13,000 fake ecommerce websites, as suggested by infrastructure code and the payment system’s gateway, according to people familiar with the matter, who asked not to be named discussing confidential information. Cybersecurity firm Yarix discovered the illicit network.

Uncovering fake ecommerce websites

A spokesman for Yarix confirmed the company is actively assisting a large-scale investigation aimed at taking down fake ecommerce websites. Law enforcement agencies from other European countries and the U.S. could later join the investigation, the spokesman added.

Officials at Italian law enforcement agency Polizia Postale on Jan. 25 started taking down some of these fake ecommerce websites related to Italian brands, the people said.

These sites are well-designed imitations of genuine corporate websites. Discounted prices usually attract customers. But no deliveries are made, and the websites generally include a real credit card payment platform used to steal buyers’ financial data, the people said.

A representative for Italy’s Polizia Postale confirmed the operation and declined to comment on details.

“What we revealed is a coordinated, infrastructured network of well-designed fake shops across the world that in the last two years have probably stolen tens of millions of euros, dollars from unsuspecting clients,” said Mirko Gatto, CEO at Yarix, in a phone interview.

Italian fashion brands targeted by the criminal network include Brunello Cucinelli, Dolce & Gabbana, Ermenegildo Zegna and Moncler, the people said. The cyber-criminals also targeted international sports brands such as Nike, Adidas and New Balance, they said.

Most of the fake shops’ servers and digital platforms searched in the current probe are located in Panama, Turkey and the U.S., the people said.

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The announcement, which coincided with a fresh round of layoffs that will affect 18,000 Amazon employees, showed how tech industry cost-cutting could ripple through the nonprofit world.

The company, which donated $500 million to charities over 10 years in the U.S., U.K. and Germany through Amazon Smile, said it spread donations too thin to have a meaningful impact. The average Amazon Smile donation was about $230 because Amazon spread the pot of money among some 1 million charities. The Amazon Smile program officially closes next month.

“The program has not grown to create the impact that we had originally hoped,” Amazon said in a Wednesday blog. “With so many eligible organizations — more than 1 million globally — our ability to have an impact was often spread too thin.”

Amazon said it will continue to support other philanthropic initiatives, including its Housing Equity Fund, which is investing $2 billion to increase the supply of affordable housing in communities like Bellevue, Washington, and Arlington, Virginia.

Amazon is No. 1 in the 2022 Digital Commerce 360 Top 1000 database. The Top 1000 ranks North American web merchants by sales. It is No. 3 in the Digital Commerce 360 Online Marketplaces database, which ranks the 100 largest global marketplaces.

Amazon fined for worker safety violations in three US states

U.S. federal workplace safety regulators fined Amazon more than $60,000 for putting warehouse employees at risk for lower back injuries and other musculoskeletal disorders.

The Occupational Safety and Health Administration (OSHA) discovered the violations last year during inspections of Amazon warehouses in:

• Deltona, Florida
• Waukegan, Illinois
• New Windsor, New York

“Each of these inspections found work processes that were designed for speed but not safety, and they resulted in serious worker injuries,” said Doug Parker, assistant secretary for occupational safety and health. “While Amazon has developed impressive systems to make sure its customers’ orders are shipped efficiently and quickly, the company has failed to show the same level of commitment to protecting the safety and well-being of its workers.”

Similar investigations at other Amazon facilities continue in:

• Aurora, Colorado
• Nampa, Idaho
• Castleton-on-Hudson, New York

Amazon spokesperson Kelly Nantel said the company takes workplace safety seriously. She said it reduced injury rates nearly 15% between 2019 and 2021.

“We strongly disagree with these allegations and intend to appeal,” she said in an emailed statement. “We’ve cooperated fully, and the government’s allegations don’t reflect the reality of safety at our sites.”

The fines amount to a slap on the wrist for an enterprise of Amazon’s size but still represent a ratcheting up of pressure on the company. Amazon has pledged to reduce injury rates that are higher than its industry peers. In December, OSHA cited Amazon for 14 record-keeping violations during an ongoing probe of six facilities in Colorado, Florida, Idaho, Illinois and New York. The unrecorded incidents included injuries to wrists, knees, backs and shoulders that resulted in employees missing work, OSHA said.

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There are complexities to be sure, but the growth of cross-border ecommerce has led technology providers, fulfillment services, online marketplaces, accountants, and advisory firms to beef up their services for retailers selling globally.

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The vote came a day after the House approved the measure on a 290-137 bipartisan vote. The bill would impose a labor agreement hammered out by rail companies, labor leaders and the Biden administration months ago but rejected by workers in four of 12 unions.

An effort by Democrats to amend the deal to include seven days of paid sick leave for workers came up short. It failed to garner the Republican votes needed in the Senate. The House had endorsed the change on 221-207 vote with just three Republicans in support. The sick leave amendment, pushed by independent Senator Bernie Sanders of Vermont, failed on a 52-to-43 vote. It required 60 votes to pass.

“Within this agreement, we’re going to avoid the rail strike, keep the rails running, keep things moving,” Biden said on Thursday. “And I’m gonna go back and we’re gonna get paid leave not just for rail workers, but all workers.”

Congress was able to pass the rail bill with after Biden asked lawmakers to intervene on Monday. A mandated cooling-off period is set to expire on Dec. 9, after which freight workers would be allowed to walk off the job.

“Suppliers and businesses across the nation are going to begin shutting down operations soon if they think a strike is imminent,” Senate Majority Leader Chuck Schumer warned his colleagues Thursday morning. “In that scenario, nobody wins and everybody loses.”

Impact of averting the rail strike on the retail industry

The National Retail Federation released a statement following the resolution’s approval in the House.

“The freight and commuter rail systems are essential partners to America’s retailers, moving goods throughout the country every day. A nationwide rail strike at this juncture would have had devastating consequences for our economy, and exacerbated inflation for American families,” NRF CEO Matthew Shay said in the statement. “We are grateful for the swift action in Congress this week to implement the Tentative Agreement, and we look forward to President Biden’s immediate signature to safeguard smooth and stable rail operations.”

The Retail Industry Leaders Association (RILA) also issued a statement following the Senate passage of legislation to avert a rail worker strike.

“Today, Senate leaders recognized just how vital our nation’s rail system is and voted to keep the country’s supply chains and our economy moving,” said Sarah Gilmore, director of government affairs. “American consumers can rest assured they will have an exceptional shopping experience this holiday season with the threat of a rail strike averted.”

RILA members include more than 200 retailers, product manufacturers, and service suppliers, which together account for more than $1.5 trillion in annual sales, millions of American jobs, and more than 100,000 stores, manufacturing facilities, and distribution centers domestically and abroad.

Rail bill lacked Republican votes

Republicans agreed to quick consideration of the rail bill after being granted a vote on an amendment that would have changed the bill into one requiring a 60-day cooling off period extension. That amendment failed, attracting the support of just 26 senators.

Wyoming Republican Cynthia Lummis and North Dakota Republican Kevin Cramer led the fight to get their Senate colleagues on board with voting for the bill, warning of devastating job losses.

“Congress has been forced into a position to either intervene in labor negotiations or allow a rail strike that will cripple our economy,” the senators wrote in a letter imploring fellow Republicans to vote for the bill. “Our response at this moment will determine whether rail workers receive their next paycheck, whether families can put food on the table this holiday season, and even whether the lights turn on.”

Enough Republicans held their noses and voted for the bill despite concerns about interfering in the labor market.

The administration lobbied Democrats hard for the bill, which risked fraying ties between the party and labor unions.

Labor Secretary Marty Walsh and Transportation Secretary Pete Buttigieg met with Senate Democrats at lunch on Thursday to urge passage of the legislation. The White House and top Democrats touted that the bill would grant a 24% raise and prevent increased health insurance premiums.

House Speaker Nancy Pelosi told her caucus about 750,000 jobs would be lost in the first two weeks of a rail strike.

Out of the 12 unions representing different types of rail workers, four representing roughly 54,500 workers rejected the contract. The unions that approved it represent about 43,000 workers, according to the National Railway Labor Conference.

Rail operators were set to begin slowing down operations as soon as this week in preparation for a strike, in part to make sure cargo isn’t left stranded.

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Of the approximately 650 ballots cast, 206 workers voted yes and 406 voted no to unionize under the banner of the Amazon Labor Union, which earlier this year won a historic election at a much larger Amazon facility in Staten Island. There were 31 contested ballots, not enough to change the outcome.

The loss is a setback for the ALU, which has struggled to expand its influence beyond New York City and even hang on to its gains there. The ALU lost a vote at a second Staten Island facility in May and is now battling Amazon over the results of the election it did win.

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The push at the warehouse in the upstate town of Schodack, was led by Heather Goodall, who started working at the facility in February. She and her colleagues were demanding higher wages, more paid time off and safer working conditions.

ALU President Chris Smalls said the union would continue to work at the facility and expressed pride in workers who “stood up in the face of a vicious anti-union campaign.” In an emailed statement, he said the election “wasn’t free and fair” and that Amazon subjected workers to “intimidation and retaliation on a daily basis.”

Smalls didn’t say whether the ALU would challenge the result to the National Labor Relations Board, as Amazon did following the union’s sole victory. The ALU has filed dozens of unfair labor practice charges against the company for its conduct in Schodack since going public with the campaign.

In an emailed statement, Amazon spokesperson Kelly Nantel said: “We’re glad that our team in Albany was able to have their voices heard and that they chose to keep the direct relationship with Amazon as we think that this is the best arrangement for both our employees and customers.”

Labor unrest has roiled various US companies in the past couple of years. Last week, Apple Inc. workers at a store in Oklahoma City voted to unionize, marking the second location to do so. A union victory at a Starbucks Corp. store in Buffalo, New York, has since led to hundreds of successful votes around the country.

Last week the labor board said workers at an Amazon warehouse in Southern California had filed paperwork to hold a vote on whether join the ALU. Amazon said it doubted organizers there had collected sufficient signatures to call an election.

The Retail, Wholesale and Department Store Union, meanwhile, is seeking to represent workers at an Amazon warehouse in Bessemer, Alabama. Federal officials determined that Amazon’s conduct during a vote there last year made a fair election impossible, and a rerun election remains too close to call. Other unions have also ramped up their efforts in recent years to organize workers at Amazon, the second largest private employer in the US behind Walmart Inc.

In the UK, hundreds of Amazon workers at a logistics hub near Coventry will vote Wednesday whether to strike. The walkout, if it goes ahead, would probably happen on Black Friday. Staff at several UK locations have previously staged informal work stoppages and walkouts to protest a 35-pence-an-hour wage increase, but a strike in Coventry would mark the first time Amazon workers have formally walked off the job. The workers there are backed by the GMB Union.

Amazon is No. 1 in the Top 1000, Digital Commerce 360’s database of the largest North American e-retailers by web sales.

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The company filed a petition with the FTC last month, arguing that the agency’s information and interview requests were “unduly burdensome.”

In an order published late on Sept. 21, the FTC rejected that request. It said the two executives could be interviewed as part of a probe, though it extended the time period for when sworn testimony could occur.

“Amazon provides no reason why the Commission must accept anything less than all the relevant testimony it can obtain from these two witnesses,” the FTC said in its decision.

The FTC has both antitrust and consumer protection mandates. It has been investigating Amazon for potential anticompetitive conduct for several years. The agency opened an investigation into Amazon Prime last year. It has been investigating whether the subscription service may have violated consumer protection laws.

The Biden administration has stepped up antitrust enforcement as a keystone of its economic policy. It seeks to reverse what antitrust officials view as decades of lax oversight over corporate consolidation and market power.

Amazon ranks No. 1 in Digital Commerce 360’s Top 1000 database. It tracks North America’s largest online retailers by web sales.

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A hearing officer who handled Amazon’s appeal of the union’s victory concluded that the company “has not met its burden” to prove that the union, the government or anyone else “engaged in objectionable conduct affecting the results of the election,” National Labor Relations Board spokesperson Kayla Blado said in an email.

Amazon ranks No. 1 in the Top 1000, Digital Commerce 360’s database of the largest North American e-retailers by web sales. It is also No. 3 on the Global Online Marketplaces database.

Qualms with the Amazon Labor Union

Amazon spokesperson Kelly Nantel said the company was still reviewing the decision.

“We strongly disagree with the conclusion and intend to appeal,” Nantel said. “As we showed throughout the hearing with dozens of witnesses and hundreds of pages of documents, both the NLRB and the ALU [Amazon Labor Union] improperly influenced the outcome of the election and we don’t believe it represents what the majority of our team wants.”

Amazon had managed to keep unions out of its U.S. operations for more than a quarter-century. The Seattle-based company had argued in a filing that the labor board repeatedly “failed to protect the integrity and neutrality of its procedures.”

Amazon has until Sept. 16 to file objections to the hearing officer’s recommendation. A regional director from the agency will then hear the objections. If the company fails to persuade the agency to overturn the vote results, it will be legally required to negotiate with the union over pay and working conditions at the Staten Island warehouse. Employers sometimes refuse to negotiate even after exhausting their appeals at the labor board. That leads to lengthy litigation in federal court. The NLRB lacks the power to impose punitive damages on companies for noncompliance.

The Amazon Labor Union victory in April in New York is part of a series of labor wins this year. They include successful union elections at Starbucks Corp., Trader Joe’s and Chipotle Mexican Grill Inc.

“To have a contract for Amazon workers in this country would be monumental for the labor movement,” Smalls said Thursday. “We always were confident that we beat them fair and square.”

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Amazon — like other tech giants like Alphabet Inc.’s Google, Meta’s Facebook and Apple Inc. — faces regulatory scrutiny on several fronts. In Amazon’s case, much of the current attention focuses on allegations that Amazon copies best-selling items of merchants selling on its websites and offers them under its own brands. Amazon ranks No. 1 in the Top 500. Apple ranks No. 3, behind Walmart.

Amazon effect

The Judiciary Committee of the U.S. House of Representatives asked the Justice Department in March 2022 to investigate Amazon and some of its executives on charges that they have withheld information about Amazon’s use of third-party seller data or lied to the committee about the topic. Meanwhile, the European Union in April 2022 opened a formal investigation into whether Amazon’s treatment of merchants on its platform violates EU antitrust rules.

Amazon did win one round in court in March 2022, when a federal judge threw out a lawsuit brought by the attorney general of Washington, D.C., claiming that Amazon’s policies illegally raised prices for consumers.

But a victory in one lawsuit is hardly likely to protect Amazon from future legal assaults. Amazon’s great success in dominating ecommerce in Europe as well as North America makes it a big target for regulators who no doubt will continue to put pressure on the ecommerce giant for years to come.

Complicating matters for the ecommerce goliath is the recent success of a unionization effort at one of its warehouses on Staten Island in New York City.

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This chart is derived from the analysis in our 2022 Top 500 Report. We add new content regularly. Check back soon for more Charts & Data Stories. 

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