And now what? Will Amazon improve their business process to avoid future situations like this?

(of course not)

Amazon is known to be two things

1- data driven 2- revenue maximizing

They’re constantly tweaking the website in order to even marginally increase revenues. Halting the transfer of funds hurts Amazon’s bottom line because those companies would just be using that money to replenish sold inventories. It’s unfortunately not a direct measurement, but if halting the transfer of funds resulted in the business going out of stock on Amazon, or leading to more delayed fulfillments, canceled orders, less satisfied customers, more refunds, etc then Amazon lost future commissions due to this. If Amazon can update their statistical models to prevent such potential loss of sales in the future without risking more false positives, then their in-house quants have strong incentive to do so.

Maybe their models already take into account this and the cost of lost commissions in such events is lower than the cost of increased scams.

"Now, should we tweak our process ? Take the number of merchants in the marketplace, A, multiply by the probably rate of false positive, B, multiply by the average cost of lost commissions C. A times B times C equals X. If X is less than the cost in increased scams, we won't do it".

"Are there a lot of these kind of issues?"

"You wouldn't believe"

"Which cloud company do you work for?"

"A major one"

My guess this will lead to a internal Correction of Error (COE) report and there will be some change to either reduce false positives or increase the velocity of addressing them by making some systematic change.

Ha! Amazon has had this velocity issue locking up legitimate funds for a decade. It's a feature, not a bug. They know it locks up funds for legitimate sellers but they don't really care that much about their 3rd party sellers and they get to retain a lot of cash for longer than usual anyway. It won't get fixed.

I think you vastly underestimate the degree to which Amazon's actions are shaped by ongoing, pervasive fraud by 3rd party sellers.

Your reply doesn't make sense. He said they won't fix it. You said he's wrong because he's not thinking about fraud. But not fixing it is better for preventing fraud anyway. So you both basically said they won't fix it.

First poster implied Amazon does this to retain more cash. Second implied they do it to prevent fraud instead.

I just mentioned that retaining more cash is a plus for them and yet another reason they won't fix it.

If this is anything like Quality Assurance at manufacturing companies than this COE will be pure performance designed to look like action without anyone having to do more than the bare minimum to look like the problem is resolved.

Can those who have downvoted me here explain why? This was my genuine experience working in a GMP company and I would like to know if this is not the norm.

That's your opinion. You have no idea if Amazon will make changes or not.

Ten years of not fixing it is a pretty good indicator that they won't.