Background to the change: Amazon was investigated by the Bundeskartellamt – the German independent competition authority. The investigation stemmed from complaints by sellers in Germany, who claimed that the Amazon platform was abusing third-party vendors and was acting in a conflict of interests, acting as both a seller and a platform at the same time.
Surprisingly, in response to this investigation, Amazon cooperated and changed several clauses in its terms of business. These changes will apply to all Amazon platforms worldwide, not just in Europe, and will take effect on August 17, 2019.
The list of changes can be found on the following Bundeskartellamt notice:
Here is a summary of the four main amendments
Thus far, Amazon had practically zero liability towards its sellers. Amazon has now added a short paragraph, saying that if it breaches the law it will be responsible for its actions and will compensate the seller. [Something Amazon was already required to do by law regardless of the change to its terms of business…]
As of today, Amazon has virtually unrestricted power to suspend accounts, without any explanation or warning. When the change takes effect, Amazon will need to provide an explanation for account suspensions, as well as a 30 day notice before suspending an account, subject to exceptions as detailed below.
Legal Action in Europe
Until now, sellers who wanted to sue Amazon in Europe had to do so in Luxembourg. This condition deterred many sellers, who avoided the legal process due to high costs. This condition has now been removed. Luxembourg will no longer be the only court of jurisdiction for all European marketplaces, and under certain conditions, domestic courts can be the competent court of jurisdiction in the future.
Rights to Your Photos and Text
Up to this day, when you upload an image or text to Amazon, you granted Amazon broad rights to use of your material. Essentially, you have given Amazon an unrestricted, non-revocable license to use and modify your material. Amazon’s rights in this respect are now limited – Amazon can use your material but may not alter it.
Are the changes significant? This is a good start. Especially the removal of Luxembourg as the sole court of jurisdiction.
But will the changes truly affect you? The answer depends on Amazon. From reading the fine print we learn that, as always, Amazon has left itself a way out of these changes.
For example, in the matter of account suspensions, Amazon declares that it will give a thirty-day warning. But then immediately adds to the terms that it is entitled to suspend an account immediately and without warning if:
– there was a fundamental breach of the agreement that was not corrected by the seller within 7 days (and in some cases it does not have to give you 7 days to correct the alleged breach), or
– that your account may harm other sellers or Amazon or customers, or that the use of the account is misleading, fraudulent or illegal.
In other words, these exclusions cover almost every type of suspension 😉
Similarly, Amazon ensures it will provide the reason for suspending your account. But … according to the revised terms, if Amazon believes that disclosing the reason for the suspension could harm Amazon’s investigation or fraud prevention, etc., then it does not have to provide a reason.
So, can these changes be considered a breakthrough? Time will tell. For the seller’s sake, let’s hope that Amazon adheres to its new undertakings and does not use the exceptions as a way out.
The language of the clause relating to account suspension:
…” We may terminate your use of any Services or terminate this Agreement for convenience with 30 days’ advance notice. We may suspend or terminate your use of any Services immediately if we determine that (a) you have materially breached the Agreement and failed to cure within 7 days of a cure notice unless your breach exposes us to liability toward a third party, in which case we are entitled to reduce, or waive, the aforementioned cure period at our reasonable discretion; (b) your account has been, or our controls identify that it may be used for deceptive or fraudulent, or illegal activity; or (c) your use of the Services has harmed, or our controls identify that it might harm, other sellers, customers, or Amazon’s legitimate interests. We will promptly notify you of any such termination or suspension via email or similar means including Seller Central, indicating the reason and any options to appeal, except where we have reason to believe that providing this information will hinder the investigation or prevention of deceptive, fraudulent, or illegal activity, or will enable you to circumvent our safeguards.”