Walmart Faces Lawsuit in its Race Against Amazon

Written by: Amelia Hoge

Walmart has been racing against time to beat Amazon’s reign over online shopping. While Amazon’s astronomical growth continues to put increasing pressure on Walmart, Walmart will go to any length to come out on top, even if that means getting sued for it.

Tri Huynh, a former director of business development at Walmart, was abruptly terminated after raising concerns to the U.S. e-commerce chief about illegitimate internal practices. According to an article in Business of Fashion, he is accusing Walmart of whistle-blower retaliation in violation of the Sarbanes-Oxley Act, retaliation in violation of California labor code, failure to prevent discrimination, and wrongful termination. Beyond the logistics, this lawsuit is primarily aimed to shine a light on Walmart’s aggressive and illegitimate actions that were taken in an effort to produce higher e-commerce sales numbers.

According to Huynh, Walmart mislabeled products so that some third-party vendors  received lower commissions. They also published misleading and inflated sales reports after failing to process over $7 million in customer returns.

Only time will tell if there will be any long-term consequences of this lawsuit. As for the short-term: Walmart’s integrity has certainly been put on the line, and its shares fell as much as 2 percent.

As for the history between Walmart and Amazon—the battle between these two companies has been heated and longstanding. From what I’ve observed, it’s like watching a game of chess: with every action from one company, there’s a reaction from the other. Take their products as an example—it is very easy to identify parallels in their products and services, and one could argue the reactionary products were meant as a way to one-up the other opponent. For example, Amazon lowered their free shipping threshold for non-prime members from $35 to $25 after Walmart announced free two-day shipping for purchases of $35 or more, Walmart launched a voice-shopping platform with Google after the rise of Amazon’s Alexa, and Amazon launched “Amazon Key” after Walmart introduced their new in-home delivery system.

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Amazon Key: a free in-home delivery system that delivers packages inside your home when you’re not there. Innovative? Sure. Creepy? Um, YES! (Photo Source)

Thanks for reading this week’s Monday Reads! 

Sincerely,
National Retail Federation Student Association @ FIT



Reference:

Featured Photo Source

BoF Article (March 15 2018): Whistle-Blower Sues Walmart For Breaking the Law to Beat Amazon

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