Amazon Terms of Service / Business Solutions Agreement

Amazon imposed a new agreement upon sellers and there are significant changes (and loopholes) to that agreement that sellers need to be aware of. Amazon Terms of Service, otherwise called their Business Solutions Agreement, contains the terms and conditions that govern your access to and the use of seller services on the platform. It is an agreement between you (or the business you represent) and Amazon.

Amazon’s New Terms of Service Explained: New Contract with Sellers

In the new Terms of Service that Amazon imposed on all Amazon sellers, Amazon promised sellers that they would give a 30 day notice before an account suspension or listing suspension would occur. Find out what these loopholes are by watching our videos below.

Amazon's New Business Solutions Agreement

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Amazon Terms of Service Explained: General Terms for Plans of Action

Amazon sellers around the world need to know that Amazon instituted a new contract on sellers. There are significant changes to the new agreement that they are imposing on you. Some provisions are really helpful and good for sellers. While others are absolutely awful. Some will help us write better Plans of Action and appeals for suspended sellers who need help getting their listings and accounts back. If you are writing a Plan of Action yourself or you are having someone else write a Plan of Action for you, they should know this new contract inside and out. They should be able to interpret it. They must understand the legal terms or you are paying for expertise that you are not getting. Whoever writes your appeal should understand the legal terminologies and the effects of the new contractual provisions.

Amazon Terms of Service Explained: Paragraph 1: Business Verification

Amazon seller suspensions, Plans of Action, and appeals for business verification suspensions have changed under Amazon’s new contract. The issue for suspended sellers in this paragraph is business verification. Amazon business verification is where Amazon suspends your account because of Amazon’s inability to verify your information, your credit cards, your identification, or your utility bills. We start with the new provision in the business solutions agreement and what sellers need to know about in terms of winning POAs and appeals when you are suspended. When it comes to business verification, specifically this new BSA agreement, Amazon can ask for additional information and it lists information Amazon may request. Amazon’s new contract with sellers is vague and could present problems. An example would be not having a utility bill, and we feel this may actually be enforced more by Amazon going forward. When it comes to business verification issues, it used to be that we could get around the need for utility bills by providing Amazon with reasons why suspended sellers don’t have a utility bill (shared living space with a spouse or parents or working out of someplace else that provides lights and electricity). Fortunately, we are winning these suspensions for sellers. But with the language in the new BSA that says, “any information” there is a concern that Amazon could ask you for things that you don’t have. What this means is that we’ve got to come up with better, creative arguments. There’s more that’s vital about the changes to this particular paragraph, starting with the fact that Amazon also states in this new agreement with sellers that any personal data the seller provides will be handled in accordance with Amazon’s privacy notice. In other words, this is just another way for Amazon to avoid liability for data breaches. Amazon essentially wipes away any responsibility. As time has shown, Amazon is an incredible company when it comes to data, but also an incredible company when it comes to covering their own behind. All Amazon sellers are going to be asked to give Amazon more and more information. Amazon is retaining for itself that Amazon can do whatever they want to sellers at its sole discretion. Here’s what Amazon sellers need to know about Amazon trying to retain sole discretion. We think this will definitely go back to arbitration, which is the end process when POAs, appeals and Bezos Escalations have failed. Specifically, we think that our efforts can deem Amazon’s contracts unenforceable, which is probably why they’re now insinuating that this needs to be put into play.

Amazon Terms of Service Explained: Paragraph 2: Service Fee Payments

Terms of Service: Paragraph 3A: 30 Day Notices & Suspensions

Amazon’s New TOS Terms of Service & 30 Day Suspension Notice. The TOS is contained in the contract Amazon imposes on all Sellers which is called the Business Solutions Agreement. The 30 Day Notice Provision…and its HUGE Loopholes are contained in Paragraph 3. Amazon’s Latest Language in the Amazon Sellers Terms of Service / TOS / Participation Agreement (which is actually called the Business Solutions Agreement). What is the agreement called between Amazon Sellers and Amazon? Terms of Service? TOS? Participation Agreement? Many Amazon Sellers and Amazon consultants do not seem to know what the actual contract between Amazon and Amazon Sellers is called. The contract between Amazon and Amazon Third-Party Sellers is often referred to as the TOS, the Terms of Service and/or the Participation Agreement. The actual contract is called the Business Solutions Agreement. The Business Solutions Agreement (BSA) is the controlling contract between every Amazon Seller and Amazon. There are many people and companies that charge suspended Amazon Sellers to write Amazon Plans of Action (POA) without knowing what the governing agreement is or what the terms of the contract mean. Paragraph Three of the Amazon Terms of Service / BSA is all about the Terms and Conditions as it pertains to Amazon Sellers and obtaining suspended Sellers’ reinstatement through the writing of a Plan of Action or POA or Amazon Appeal. The prior Amazon TOS stated that any Amazon Seller Account could be suspended for any reason at any time. Now, Paragraph Three has changed that….or has it? CJ Rosenbaum breaks down the new TOS. Subsection A Amazon is supposed to give 30 days’ notice before it suspends an Amazon Seller or an Amazon Seller’s listing. Subsection A of Paragraph 3 of the new Terms of Service TOS contains a huge exception to Amazon’s new 30-day rule. Amazon created loopholes to allow it to avoid giving suspended Amazon Sellers 30-day notice. In many ways, the exceptions to the 30-day rule are bigger than the 30-day rule itself. There are also many good aspects of this subsection that we can use in writing Amazon Plans of Action (POA). Material Breach The first huge exception in the new Terms of Service TOS is that Amazon can immediately suspend an Amazon Seller or his or her Amazon listing if Amazon thinks there has been a Material Breach of the TOS. There is specific law on what is “material” and what is “immaterial.” Identifying and arguing in your Plan of Action POA what is material or significant versus what is immaterial or insignificant will be vital for suspended Amazon Sellers. Amazon fails to define what it means in terms of the Amazon Plan of Action (POA). If suspended, you can argue & use Amazon’s new TOS to your advantage. Amazon’s New TOS provides time to “Cure” The word “cure” is a legal term. Cure means to make it right. It does not mean turning back the clock and removing conduct. It is remedying it. Time to “cure” is the ability to fix the problem. That is what the legal term “cure” means. If you were in material breach and cured as soon as you found out about it, you should be in compliance with the new TOS. The ambiguity in Amazon’s new TOS provides arguments for suspended Amazon Sellers to assert in a Plan of Action. Subsection A states that Amazon will use “reasonable discretion” in making decisions. “Reasonable discretion” is legalese. If you had an intellectual property complaint asserted against your Amazon Sellers’ account, a Rights Owner complaint, and your Amazon Seller Account was suspended for a product you never sold, it seems “unreasonable” for Amazon to suspend. The new TOS creates gray areas and judgment calls on what is reasonable and what is not. You can argue suspensions are unreasonable when Amazon’s FBA team put a product back into your inventory after a return. It is unreasonable to harm a Seller for an FBA error.

Terms of Service: Paragraph 3B: Suspended Accounts & Listings

Paragraph 3 of the new Terms of Service (also called the Business Solutions Agreement or the Participation Agreement) promises that Amazon sellers will receive 30 days notice before an Amazon account or listing suspension but Amazon also created three huge loopholes for itself where Amazon will not provide 30 days pre-suspension notice to sellers.

In the second section of paragraph 3 of the new Amazon Terms of Service, Amazon retained a huge loophole where it will not provide advance notice to sellers. Here, if Amazon claims that you have been using your account for “deceptive, fraudulent or illegal activity,” Amazon will suspend you without 30 days notice. This will then require a Plan of Action. Amazon does not clearly define what it means by “deceptive, fraudulent or illegal” activity. This failure to identify what “deceptive, fraudulent or illegal activity” refers to leaves the door wide open for Amazon to suspend without notice and also leaves the door wide open for creative arguments in Plans of Action and Amazon appeals if a seller is suspended.

For example, if a seller is accused of infringing on someone’s intellectual property rights, that is arguably illegal activity. Amazon may suspend the seller immediately. On the other hand, in a POA, if there is no violation of any criminal law, then the seller did not, arguably, engage in any illegal activity. “Fraud” is a legal term and has legal significance. We can use the legal definition in plans of action to help get sellers reinstated. Amazon’s failure to identify who determines whether an activity is fraudulent, deceptive, or illegal is also both good and bad for sellers. It is bad because Amazon will suspend people / companies without any significant determination. Amazon’s failure to be clear is good for sellers because it leaves open many arguments to be made in POAs and appeals.

Terms of Service: Paragraph 3C: 30 Day Notice Before Suspension

In the new Terms of Service that Amazon imposed on all Amazon sellers, Amazon promised their sellers that it would give a 30 day notice before an account suspension or Amazon listing suspension would occur. However, Amazon created three huge loopholes that are so broad that we broke this portion of our videos on the new terms of service into three separate sections: loophole A, loophole B, and loophole C.

In the new terms of service which is also called the Business Solutions Agreement, Amazon is getting around this well-publicized 30 day notice. We don’t know what that harm means. Does that mean just the $4.99 that people bought the toy with, is that the harm ,or is it some type of physical harm? We have been successful in showing that Amazon cannot demonstrate any actual harm at all in the arbitration. And we need to work that into our plans of action because Amazon claimed in one case, they lost $2 million. How much did Amazon make the week before this occurred? I don’t have that number. How much has Amazon made the next week? Has Amazon made more money week over week, quarter after quarter for the last 10 years? The answer is consistently yes. So they can’t show any harm. So if Amazon’s claiming harm to it, I think that opens the door to a lot of persuasive arguments by using their own contract issues in your plans of action, which I think is a really good idea.

Also, I thought in this subparagraph C that they have, a notice is going to get sent to seller’s, email, seller central, right? As a law firm is that we can analyze the heck out of this contract and then find things that Amazon didn’t do on your account and use that in a plan of action to get you reinstated. Also, Amazon is also reserving in C the ability, again, not to tell sellers why they’re suspended. Okay? Which also, it’s not a really major change, but just that it’s back in here and this whole premise that we’re going to give sellers notice and tell you what’s going on. We hope it happens a bit. If we see Amazon telling sellers what the problem is in 20% of the suspensions, I think that’d be a great thing for sellers. Oh, I think that’d be fantastic. I think it’s more unlikely that that will be, I think it’s more likely it’ll be very similar to the way it is now. It just sounds a little bit better the way it’s worded here. And I think by them spelling out when you get notice and when you don’t, when you get an explanation, when you don’t, we can use that against Amazon in a persuasive way. Not like in a negative way, but in a really persuasive, positive plan of action that you should’ve been given notice because it was not a material breach. Amazon was not at risk of suffering any harm, so therefore you should have received notice. A lack of notice would mean that you got reinstated. That’s the information for this loophole, and please make sure you watch all three videos regarding the loopholes Amazon created where it will not give you a 30 days notice or the seven days to cure.

Amazon Terms of Service Explained: Paragraph 4: Private Label Sellers

Amazon’s New Terms of Service / TOS. What Private Label Sellers and Brands Need to know. Paragraph 4: License The TOS is formally called the Business Solutions Agreement (BSA). It is your contract with Amazon. “You grant us a royalty-free, non-exclusive, worldwide right…” It used to say, “Perpetual and irrevocable,” which means forever and you can never retract it. The words “perpetual” and “irrevocable” have been omitted. “For the duration of your original and derivative intellectual property rights.” It is basically the same thing. However, it does not seem to include your heirs.You are arguably waiving absolutely everything for as long as you own it. Amazon removed the phrase, “Intellectual Property Rights in your Mark.” They changed it to, “Your Materials.” “Your Materials” will include not just your Trademark and Logo, but other things that you would not normally transfer to anybody else, your Copyright Material. There are many written materials with copyright protection which other companies cannot sell. However, if that is part of “Your Materials,” then, you are giving that to Amazon as well. Included in “Your Materials,” are your licenses. You may be giving Amazon the contractual ability to be a hijacker on your product. Amazon may: • Go around you and buy your products from your manufacturer or authorized retailers. • Use Amazon vendors to get your products • Take over your listing It also states that “Nothing in this agreement will prevent or impair our right to use Your Materials without your consent.” This paragraph is what we call “internally inconsistent.” The changes in this paragraph are significant. It allows Amazon to use all of your Marks, Licenses, and Copyright on all of Amazon – associated properties. It uses the word “Affiliates.” In any contract, you need to go back and look at the definitions. Amazon defines the term “Affiliate” as “any other entity that directly or indirectly controls, is controlled by, or is under common control with that entity.” Hence, Amazon Affiliates may refer to all of the different businesses that Amazon is involved in or may go into, in the future. It is also reinforced by the definition of the term “Amazon-associated properties.” Amazon says, “That means any website or other online points of presence, mobile application, service, or feature, other than an Amazon site, through which any Amazon site, products, or services are available on any of them are syndicated, offered, merchandised, advertised, or described.” This is really a broad definition of how Amazon can use your intellectual property rights and anything included with your materials. It encompasses all of the Amazon sites around the world, including any other businesses that Amazon buys or owns. It also includes any place elsewhere where Amazon advertises. This is a big change. This is broadening of Amazon’s rights against you: to take what is yours. This provision will not stand. You need to know about this provision, most especially if Amazon has hijacked your listing or if they have allowed others to sell Amazon Counterfeit products of yours. You need to know how to fight it, what your leverage is and where the discrepancies are. You need to know what portions of the contract can be used to your advantage, should you have a problem with Amazon Infringement in the future.

ToS: Paragraph 5 & 6: Representations & Indemnification

It is really important that sellers realize that the change in the language of section five now, it expands and broadens the scope of a seller. It originally they used to use language such as “You” to specifically identify you, the third party seller. And now it’s referring to you and the entity that you’re associated with as a whole. Now it’s not just about the representations you make to Amazon, but it’s about the representations the entity makes as a whole. Prior it only pertained to the individual seller. Now the entity is liable. And how that comes into play and how it affects sellers, there’s no more putting the blame off, putting the responsibility on may be an employer or somebody else. The entity is held to that standard that the information they represent is truthful. I think this kind of places a duty on the president or the CEO of a company to make sure that they know that they inform their employees as to who is specifically authorized to act on behalf of the corporation when they’re transacting business with Amazon. The next thing I’d like to talk about is section six. So I guess just on a very basic level, indemnification is the process of a party having another party basically indemnify it from its liability. So another party will come in and pay the other party the expenses that it incurred in liability in legal action. So to make it easier for sellers to understand, Amazon will let you sell any product you want for the most part, as long as it’s compliant with their policies. Amazon doesn’t want to be responsible, and they’re not paying if somebody gets hurt. Do you want to sell something that’s inherently dangerous? Somebody gets hurt. It’s on you to represent them, you to hire the attorney, and you to make sure Amazon pays nothing. So I’d like to maybe dig a little bit deeper into the changes in the indemnification language in the BSA agreement. So under the old BSA agreement, a third party seller was solely responsible for representing both themselves and Amazon as well. And the way it would work under this old agreement was that of a person screwed up in representation then Amazon would then just sue that third party seller after the fact. Amazon’s only recourse was to then sue the seller for the amount of money they had to pay, which they should not have by the BSA agreement. The new change, what it adds in is that Amazon, their counsel needs to sign off and consent to any settlement agreement or judgment entered into. Rather, if that case happens, at least they’ve done their due diligence and made sure that their attorney realized this is a fair judgment. This is good. Everything worked out in the settlement. It’s essentially they trust you can go out and hire a lawyer, but they’re going to put their sharks on it as well, like a big brother and oversee the case to make sure it’s being settled properly. I think that’s one of the key things that this paragraph was added to. Again, I think a lot of these changes come from our cases against Amazon and one particular one when they said that they didn’t actually indemnify hold harmless, I think Amazon just didn’t like the language in the settlement agreement. So I think what Amazon’s lawyers are going to do is they’re going to have their forms that they’re going to want to try and get admissions that Amazon had no role, that Amazon was not the retailer, that Amazon is going to use this to cover their behind even more than they do now. But that’s not bad for sellers. It’s really not bad to have Amazon’s lawyer look over the agreement. It’s not going to cost the seller anything, at least we hope not, and they’re pretty smart people. So I see this also the fact that yet they want to look at it and they have to sign off on it as a good thing. I don’t think they got to put the kibosh on resolutions and settlements. Certainly if it’s done well and they have no liability, but I think that they’re going to give it a once over as well. I think that’s where it’s going with this.

Amazon Terms of Service Explained: Paragraph 7A: Disclaimer & General Release

This is the section about the disclaimer and general release. Based on the changes we’ve seen, there have actually been no significant changes to this section. Now, 7a, beginning here, the language states that the Amazon site and services, including all content, software, functions, material, and information made available on or provided in connection with the services are provided as-is. Now, what that means is when you accept to use the service and participate in using it, it’s taken as is. There’s no later claims or, “Oh, I thought this service would include this feature or I’m dissatisfied. I want to invalidate this contract because I thought it included another portion of a selling feature that I wanted.” You take it as is. The services provided as-is. There are no extra guarantees that Amazon is providing here. If there is any sort of changes to Amazon’s policies, anything to Seller Central, this is a way of basically protecting themselves in case some seller claims they didn’t know A and B. They incurred significant damages from it. Amazon didn’t notify them. That’s essentially what they’re saying with that first part in section A. Then it goes into the second portion, which says you use this service at your own risk. Now, using it at your own risk is essentially another way of encumbering that they’re not responsible for the disputes you may find yourself into with another seller or another company due to the use of this service. Amazon also states that any obligation, liability, whether or not arising from their negligence. Even if Amazon is negligent, they’re claiming that they’re not going to be held liable. There’s essentially nothing you can do about it. At the end of section A, Amazonis not liable if there is a flaw or error in their system. If for whatever reason Amazon, the selling platform, goes down, has a server crash and leaves you unable to make your sales for the Black Friday weekend, it’s not their problem. They’re not responsible. By entering into this agreement, you’re aware that such errors, such hiccups in the software can occur. If they do, Amazon is not liable for the damages that follow. Not great for sellers anything that’s uninterrupted, but this is what you agreed to when you signed up to sell on Amazon. If it goes down, if it’s not secure, if you get hacked, any sort of interruption, they’re claiming that they will not be liable per this agreement.

Amazon Terms of Service Explained: Paragraph 7B: IP Rights Owner Complaint Dispute

We are going to talk about paragraph 7 subsection B. This section basically states that if any sort of dispute arises between more than one participant, so seller A vs. seller B, each participant releases Amazon of all liability. That includes any claims, any demands, any damages, every kind of nature known and unknown, suspected and unsuspected. Pretty much, Amazon is saying they’re not involved in this specific transaction. They are the platform. If there’s any sort of dispute between sellers or a seller and a buyer, that they are not going to be held liable. If you’re wondering what kind of disputes here, everything from intellectual property infringement allegations. Sometimes there’s product liability. If you sell a product in Amazon, the consumer finds himself injured and they want to now sue for the personal injuries they’ve sustained, you have to release Amazon. Amazon is not going to take liability in this. By agreeing to this contract, you are going to be obligated to release Amazon from any such claim. When I mentioned seller A and seller B, that could be intellectual property issues. Seller A says, “Seller B is infringing on their brand.” Product liability, a buyer buys an item from a seller. They get injured from it. Amazon is claiming they are not liable for any of that because they are just the platform. They are not actually involved in the specific transaction.

Amazon Terms of Service Explained: Paragraph 8: Amazon Placing Liability on Third Party Sellers

Business Solutions Agreement, section eight, which is titled Limitation of Liability. This section was actually not changed in the slightest. Amazon kept this section entirely the same as it was in the previous Business Solutions Agreement. Essentially what it says is that they will not be liable whether in contract, warranty, tort, to you or any other person for pretty much any reason they bring up in contract, warranty, tort. Anything with negligence, product liability. If you buy a product on Amazon and say someone gets injured from it, you cannot go after Amazon. Amazon is limiting their liability. Now that doesn’t mean that you can never retain any sort of compensation from Amazon. We find that a lot of our clients that go to arbitration … Just because this is something that they want to put in there, so something they can point to when an arbitrator is making their ruling. But often if you have a strong enough case, usually they will settle the case for a certain amount of damages. Obviously, depending on the specific circumstances, but it’s almost like a catchall. It almost serves as something that Amazon wants to have in there just in case. There’s even a part in here that says, “Even if Amazon has been advised of the possibility of those costs or damages,” they’re still not liable. It also brings up aggregate liability arising out of or in connection with this agreement. Again, Amazon is really just trying to limit any potential liability they have. They’re such a massive platform. There are thousands and thousands and thousands of transactions a day. There’s bound to be some problems. Someone’s going to get injured, someone may be negligent, could be in contract, could be in tort. There could be all sorts of issues. In short, Amazon is limiting their liability. That is what this section is all about and I believe that is the main reason why they didn’t want to tweak any language. They liked the way it sounded. It covers a lot and again, it limits their liability.

Amazon Terms of Service Explained: Paragraph 11&14: Transaction Info Confidentiality Anti Trust

The entire paragraph was taken out so that begs the question, “Why would they remove an entire section?” I believe if I’m not mistaken, it’s the only paragraph they removed in full. So Amazon is very adept at changing their contracts constantly in a way that protects Amazon from liability. So, as we’re going through it paragraph by paragraph in the agreement as a whole we saw the entire thing was crossed and there’s no way Amazon was giving up an entire paragraph of anything. Instead, they seem to have consolidated it. So let’s start with what was crossed out in 14 and then we’ll go back to how it’s been beefed up in paragraph 11. The first part of it is that you will not disclose any Amazon transaction information. I don’t see here where it says what transaction information means. To me, that can mean pretty much anything from making a sale to any sort of I guess confidential information. So it’s a wide range for what that could mean. Well, it’s super wide. We’ve seen this issue come up at the arbitrations where you have a seller who Amazon’s not paying or they’ve suspended, they released that information to somebody else, or to an employee, or a staff member, or a consultant out there who doesn’t have attorney-client confidentiality. And then Amazon uses that later on to justify their conduct that says, “Hey, you weren’t supposed to reveal how we do business and you did. You gave it to a launch company. You gave it to a consultant. And the agreement did say that you cannot do that.” And it also then they’ll look for the correspondence because further down in paragraph 14 it talks about disparaging communications. So, these are some of the ways Amazon will often fish for reasons to have suspended you or fish for reasons to have kept your money. And they’ll talk about the provisions in paragraph 14 to use it to harm a seller after they’ve already taken away your inventory, withheld your money, kicked you off the platform, and all sorts of things like that. So that’s the substance of paragraph 14. Now they’re talking about how Amazon has rebuilt in its own protections back in paragraph 11. So for paragraph 11, it’s all about confidentiality and they add personal data into the subject line. They also again remove Amazon transaction information. Some are good for sellers, some give us a lot more wiggle room in terms of plans of action, others are tightening up loopholes that we’ve been using for years against Amazon. So, they’ve taken the transaction confidentiality out of 14 and stuck it into paragraph 11 where you’re still not supposed to reveal what goes on between you and Amazon because Amazon cannot prevent you from talking to your accountant about it. They can’t prevent you from talking to people within your entity which is a great reason to use corporations for Amazon accounts. And they certainly cannot come down on you for revealing it to your lawyer. Also that you can’t reveal it to the government which I don’t think was in the last one. So they made sure to include that as well. What they’re trying to do, we think this is part of the whole antitrust issue that Amazon faced a few months ago and where Amazon voluntarily released sellers that obligation that you can’t sell your products any place else cheaper than you sell on Amazon which is antitrust. And the reality is sellers don’t have much information from Amazon. If you’re an Amazon vendor you don’t find out about the intellectual property complaints, the counterfeit complaints that Amazon receives and keeps track of. You don’t find out about a lot of the complaints that Amazon receives. In paragraph three of the new business solutions agreement, Amazon says that all of their obligations and they terminate that, so you’re done, but as a seller you should keep fulfilling orders even though Amazon may not release your money, and in this paragraph it conflicts with paragraph three because it says that obligations continue five years out. Now it’s also unilateral which leads to another discussion about unconscionability which is a way of attacking this contract for being just so terribly unfair.

Amazon Terms of Service Explained: Paragraph 12: Force Majeure

Today I want to specifically talk about one of the shorter provisions which are found in paragraph 12 and this referred to as the force majeure clause. Now force majeure is just a fancy way of saying superior or intervening force and it’s actually a contract term that refers to events that are outside of the control of the party. Paragraph 12 force majeure states we, as in the Amazon, will not be liable for any delay or failure to perform any of our obligations under this Agreement by reasons, events, or other matters beyond our reasonable control. So basically what this means is that if there’s something like a strike or a riot or more commonly an act of God, which legally refers to things like hurricanes or tornadoes or other natural disasters, that Amazon cannot be found liable for their failure to perform in those situations. Now, this is a pretty standard clause in contracts, but what’s interesting is that the right usually extends to both parties, but here Amazon specifically states that the right applies only to them. Now this is interesting and again seems one-sided, but on a positive note, our firm has seen that Amazon will work with sellers if they are affected by something like a snowstorm or a natural disaster. Typically, for example, if fulfilled by merchant seller has an issue with shipping products out as expeditiously as they should during let’s say a blizzard, a well-written plan of action will usually work to get Amazon to resolve the issue with the seller.

Amazon Terms of Service Explained: Paragraph 13: Relationship of Parties

Section 13 goes to define the relationship between the parties. Now, there were no significant changes, or changes made at all, to this segment. However, I’m still going to go ahead and define what it means for sellers. So essentially, the relationship of the party, by entering into this services agreement, you are now engaging as an independent contractor. You’re not employed from Amazon, you’re responsible for your own taxes, you’re simply providing a service under a contract. This segment explicitly states that there is no partnership created by the signing of this agreement, hence, two or more people entering into owning a company with the intention to share the profits and authority. It’s explicit you will have no authority to act on behalf of Amazon. And finally, it states it’s non-exclusive. So the relationship you enter into with Amazon is one as an independent contractor, and that is the purpose of the clarification made in Section 13 of the BSA agreement.

Terms of Service: Paragraph 14: Suggestions & Other Information

Section 14 is suggestions and other information. There were no changes in the preexisting BSA from then to now, but I will go ahead and define what this section means. This section essentially states if you or your affiliates elect to provide or make available suggestions, comments, ideas, improvements, or other feedback or materials to use in connection with Amazon services, Amazon has the right to do whatever they want with it. They can go ahead and use it, they can market it, they can disclose it to another individual. So any potential improvements or suggestions or ideas you present to Amazon, things you might think might make them make their system more fluid, they have the right to do whatever they want with that information. So sellers should be aware of this before giving them any such advice or suggestions on services. In addition, Amazon states that in cooperation with any governmental agency, potential lawsuits, they have the right to disclose such information as well as the information contained by the sellers in their system. Essentially, that’s all that encumbers section 14.

ToS: Paragraph 14: How Sellers Should Be Wary What They Post

As you all may know, Amazon recently made many changes to its Business Solution Agreement. However, this section they haven’t changed at all since the last agreement has been implemented. We do want to advise sellers that there are still of course risks with this specific section. Pretty much a summarization of what Amazon is implying is that any information that you put out on the platform ultimately is theirs and they own those rights. We always want to just inform our clients and any sellers, in general, to always be wary of this and whatever information they post out there. This is just another thing to look out for when you are selling on such a big online platform like Amazon. All that information that you post on that platform is definitely not safe. Additionally, in this section, Amazon does mention they will use any feedback and they could use that actually to your disadvantage, seller’s disadvantage, and they could provide any of the information to the government. So depending on what platform you’re selling on, sellers could also run into this issue, and once it gets higher than Amazon, this can become a real potential problem for both you and your business.

ToS: Paragraph 16: How Related Account Suspensions Can Occur

This section has not been updated. Everything is the same. What this section is saying is that the seller is always responsible for their password for their access to their account. You are only allowed to give out your password if that third party is authorized, and you are solely responsible for any use of action taken under your account. So pretty much Amazon won’t be taking the blame if someone does gain access to your account even if it’s accidentally or intentionally unintentionally. So it’s always important that you don’t give this information out and even beware of giving it to some employees. You still could run into issues. I know Dana recently had a case she was working with where this specific scenario occurred to one of her clients. Dana, why don’t you tell us a little bit about that. All right, so this was actually a related account suspension. What happened was our client have access to a third-party service, who was their business manager. Unfortunately, the business manager ended up signing onto their account with their password but was also doing the same thing with their other clients. So everybody was flagged for related accounts. And although we did have to appeal to Amazon for this, and it did take a few tries for Amazon to respond, them saying in this section that you are allowed to give it out to a third party that’s authorized does not always… It’s a little confusing because if the third party accidentally signs on from the same IP address as another client, then they’re flagged for related accounts. That’s a really hard suspension to come back from. Yeah, we do have trouble winning those. We do have some success, but when it’s issues like this, sometimes it takes a while for Amazon just to understand specifically what happened.

Amazon Terms of Service Explained: Paragraph 16: Password Security

This paragraph has not changed substantially at all, but it is definitely important for sellers to know how Amazon treats security issues because as part of the arbitration team, I’ve seen several sellers who are unfortunately victims of hacked accounts, and we’ve seen how Amazon treats these situations. However, the new contract where the contract states that sellers are the ones solely responsible for maintaining their password security. So once again, Amazon is excusing itself from any liability to protect sellers. In this case in terms of the security of their accounts. This is interesting because even though Amazon is limiting their liability, we do once again on a positive note, see that in situations where an account is hacked, that Amazon will act responsibly. Now, what do I mean by that? We filed several arbitrations against Amazon specifically for this reason, that they allowed a seller’s account to get hacked and that when a seller tried to act pursuant to the contract and change their password because they knew their account was hacked, Amazon was unable to resolve the issue for our client. When we do file these arbitrations, we find that although the contract limits Amazon’s liability, that Amazon is willing to amicably resolve. And I don’t think we’ve ever had a hacking case that actually went to a hearing. Anytime a seller has come to our firm stating that their account has been hacked, we’ve been nearly or, I think, always 100% successful in getting those sellers back to business.

Terms of Service: Paragraph 17: Importance of Abiding by the Law

So this section of the agreement actually hasn’t changed since the previous Business Solutions Agreement, but we do want to give sellers some tips to better understand this specific agreement section, and to ensure that they don’t run into similar problems. This is probably a section that will not really ever be updated. What it’s saying is that as a seller, you cannot violate the United States embargoes. For those of you that don’t know what that is, it’s just a ban on exporting goods to certain countries. So make sure if you’re selling, just always look out for the law. That is definitely something that you can get in trouble if you violate. Yeah, you always want to abide by the laws, especially if you’re selling in the United States on that platform. But sellers can also run into issues on any other platforms or exporting goods to certain countries that are either banned by Amazon, or that just have different laws than the United States.

Terms of Service: Paragraph 18: Changes to Expedited Arbitration

One of the most important features of the arbitration process is that it’s supposed to be fast and efficient. Both cost economic wise and timeline-wise for sellers. Amazon’s new contract is trying to take that away from the arbitration process. And what I mean by that is there’s something called expedited arbitration. Not only is the arbitration generally supposed to be faster and cheaper under the rules with the American arbitration association, which is the company that Amazon chose, but they also created this thing for an expedited process. We’re going to be talking about how Amazon is trying to change the rules of the company that Amazon chose. The first is that all claims for less than $75000 under the AAA’s actual rules are supposed to be adjudicated under the expedited procedures, which normally means that you’re entitled to a hearing within 30 days of the arbitrator appointment. It also saves sellers a boatload of money because the arbitrators are stuck at a flat fee, which is 600 per side rather than billing the sellers and Amazon by the hour. Amazon’s limiting those two features of the expedited rules in two ways. One is that instead of having claims up to $75000 be per the expedited procedures, Amazon is limiting that claim amount to $50000. If Amazon is able to impose its will on the AAA and we don’t think the AAA is going to go along with it, but we don’t know yet. It’s going to drive up the costs tremendously where it may or may not be worthwhile to seek between 50 and $75000, you might as well go higher than that. Amazon’s new contract takes away the feature of the rule and makes it so that hearings are within 90 days of the arbitrator appointment, which literally makes the process three times as long. For a seller who’s supposed to be out. Our prior experience indicates that Amazon didn’t permit sellers to sell or change ownership of their account, but the new assignment provision has a very loose definition of the word “affiliate” and says that Amazon will allow if you get their written consent, sellers to assign the agreement to any of their affiliates. It says, “With respect to any entity, any other entity that directly or indirectly controls or is controlled by or is under common control with that entity.” So the assignment provision we think is actually very good for sellers. However, Amazon still has very strong unilateral provisions in its contract where you can sell the business and that the buyer can get shut down the next day. The new paragraph 18, which is the choice of law, dispute resolution, and the assignment provisions. It also has an interesting language that was in the prior BSA that’s been omitted from this new drafted version. And the provision that’s been left out says, “Amazon’s failure to enforce strict performance of any provision will not constitute a waiver of our right to enforce such provision or any other provision subsequently.” And what that means is if Amazon doesn’t give you notice that you’re doing something wrong under the old BSA, that meant they could still suspend you basically without notice. The newest BSA took this language out, which kind of goes with the new termination paragraph that says that Amazon’s going to give sellers a right to appeal within seven days of notice of an issue with their account. Let me just interject here for a second. The contract is so vast that I’m breaking it up among our legal team here and Amazon does say they’re going to give you 30 days’ notice. That was the big splash in the news there. There are three huge loopholes that Amazon has reserved for itself. Amazon has all the rights, sellers have practically nothing, ad we use that one-sidedness to argue two arbitrators that portions of the contract should not be enforced against the seller because it’s so terribly unfair. Okay. What is the new term of interest that Amazon has put in? It says, “Amazon retains the right to immediately halt any of your transactions, prevent or restrict access to the services or take any other action to restrict access to or availability of any inaccurate listing and inappropriately categories, items, any unlawful items or any other items prohibited by applicable program policies.” So to me, Amazon made a new termination paragraph and then in paragraph 18 all the way down at the bottom, they had this language saying, “Oh, by the way, we can do whatever we want to you.”

Amazon Terms of Service Explained: Paragraph F4: Compensation & Moving Inventory

The first thing I want to bring up would be the section where they’ve removed as your sole remedy reimbursement. Moving forward, Amazon will not reimburse you if you are an FBA user and your products are damaged or your inventory is lost. They will, however, compensate you. However, when you think of compensation, that could be anything. Amazon has changed the language. If we know anything, Amazon changes the language to protect itself. Reimbursement always seemed to be the cost of it. There was a whole provision in place that you would get reimbursed the sale price, less FBA fees. But now it’s saying compensate. We don’t know exactly how Amazon’s going to play this out. But compensate, Dana brought up in my office a few moments ago, could be like giving you a gift card, or maybe lowering fees, or doing some type of an offset. We really don’t know how that’s going to play out, but it’s certainly a provision that’s important for Amazon sellers to be aware of. I saw right above that Amazon has kept a sentence that we may move units among facilities, which to me makes it really difficult for sellers to opt-out of commingling. Also, Amazon shipping it from New Jersey to New York, Connecticut, Massachusetts, and all of a sudden your products are getting banged around, they’re getting damaged, that you’re going to get dinged with like you sold as new or other complaints. That’s still in the paragraph. Well, it’s still on this reimbursement compensation. Amazon before used to take liability for any reimbursements. At this point, now that they’ve gotten rid of that completely, they might compensate you. Right. What’s going to be the factors for Amazon’s decision, whether they’re going to compensate you or just kind of screw sellers out of the value of their products? We don’t know exactly how this is going to play out, but these are some of the issues that Amazon sellers face. I see it from our perspective of writing plans of action for sellers that we are going to need to argue that they should compensate or they’re required to compensate for whatever reasons and argue the provisions of F-4 when they owe sellers money. That’s definitely something that we have to figure out. I think we can win these arguments. I see the more broad Amazon makes these paragraphs, the better it is for us to come up with creative arguments and plans of action and appeals. I noticed that Amazon changed its reservation of rights in terms of limiting inventory on its shelves as stepping back a bit and making it even harder for sellers to interpret when Amazon will or will not refuse inventory. It also flies in the face of the main news that came out of this change that Amazon was going to start giving sellers more notice of issues and more opportunities to be heard and more opportunities to appeal. But the language change in F-4 regarding storage is taking away from that. We had a lot of conversations about paragraph three, the terms and conditions, how we’re going to give you 30 days’ notice except for these three humongous loopholes. I think the F-4 storage provision is another one of those loopholes where Amazon’s going to give you even less and less noticeable, not more. You know, that’s a great point. Is it going to cover wholesale costs? Is it going to cover retail, less FBA? Is it just going to be something else that’s not liquid? I mean, we just don’t know yet. All right, Amazon sellers, so that is the update specifically for paragraph F-4, Storage, in the new Amazon services Business Solutions Agreement, which is your contract with Amazon.

Amazon Terms of Service Explained: S6: How Gaining Control of Listings is Problematic

So originally, this section was control of Amazon’s sites, and it has recently been changed to Amazon’s website and services. So we do think some sellers will run into issues with this portion of the document being a little bit too vague and open to interpretation. Specifically, it could be very misunderstood. It’s not really clear what Amazon is requesting. And it almost seems like Amazon is going to give sellers more control over the listing page. So the way that it’s worded makes Amazon insinuate that they will be giving sellers more control, but it also looks like they will be able to remove and suspend any access. And they’re pretty much wording it in a way where they’re saying they won’t remove any access or privileges, but they have the right to do it. So this could definitely run into issues. We do see a lot of listing suspensions or even IP complaints occurring as a result of the changes in this specific agreement. And also, this agreement mentions that Amazon will be assigned rights and responsibilities for anything that’s on their website, which still is a way of Amazon saying they will have control over the listing pages. If you’re trying to create a listing or even join a pre-existing listing, we do think sellers will run into issues with this. So all in all, I personally think that sellers are still going to have an issue gaining control of listings, even if they are the rights owner. And they might even, for certain listings, they might even need prior approval from Amazon. So we do see it causing types of listing suspensions or IP suspensions.

If you’ve been suspended on Amazon, contact us for a free consultation: 1-877-9-SELLER.

GET HELP NOW: The law firm of Rosenbaum Famularo, PC is required by law to assure you 100% confidentiality. We protect your privacy under the Attorney-Client Privilege.

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