Amazon must be fairer with the merchants who sell their products on the online marketplaces. Andreas Mundt, President of the German Federal Cartel Office, has announced this.

It is a great success for many small and large companies operating in Amazon‘s marketplaces. The Bundeskartellamt has achieved far-reaching improvements in the online giant’s business conditions. In the past, many dealers had criticised Amazon’s high liability risks and arbitrariness, among other things. Due to numerous complaints, the Bundeskartellamt had opened proceedings against the company in November 2018. Andreas Mundt, President of the Bundeskartellamt: “The changes concern the unilateral exclusion of liability in favour of Amazon, the termination and blocking of the accounts of the dealers, the place of jurisdiction in disputes as well as the handling of product information and many other questions. Our proceedings have brought about far-reaching improvements worldwide for the dealers operating on the Amazon marketplaces. The process will be discontinued.” Remarkable: The adjustment of the terms and conditions will be carried out for the dealers operating on the Marketplace for the German marketplace amazon.de, for all European marketplaces as well as worldwide for all Amazon online marketplaces including the American and Asian sites.

What changes exactly did the Bundeskartellamt bring about?

According to the Bundeskartellamt, the amended terms and conditions will come into force around mid-August. They include, for example, a much improved liability rule for dealers. So far, Amazon has practically been exempted from any liability towards the dealers. This exclusion of Amazon’s liability will be limited and narrower in favour of the dealers. In future, Amazon will be liable in the same way as the dealers for intent and gross negligence as well as for breach of essential contractual obligations. In addition, companies will benefit in future from a changed place of jurisdiction. Until now, Luxembourg was the exclusive place of jurisdiction in the European terms and conditions for the marketplace as well as in the European terms and conditions for payment transactions. In particular, this regulation has made it more difficult for smaller dealers to seek legal redress at all. Under certain conditions, domestic courts may in future have jurisdiction.

Improvements in cancellation, blocking and returns also possible

According to the Bundeskartellamt, Amazon has so far had an unlimited right to immediately terminate and block the accounts of merchants. All this without giving reasons. In future, a 30-day notice period will apply to ordinary notices of termination. In the case of extraordinary terminations and suspensions, Amazon is now obliged to inform about these steps and to justify them. Dealers may also expect improvements in the case of returns. Until now, they had to bear the costs and other consequences of a refund decision made by Amazon. If merchants consider the return to be unjustified, they can lodge an objection under the new regulations. If necessary, they can also assert a claim for compensation against Amazon. It will be easier for Amazon dealers to express their displeasure in future. Until now, public statements about the business relationship with Amazon were only permitted with Amazon’s prior written consent. This clause has been largely reduced.

Bundeskartellamt restricts image specifications

There are also changes in product information and usage rights. Until now, Amazon dealers had to grant extensive rights to use their own product materials such as information, descriptions, images, etc. The new product information and rights of use have also been changed. In addition, this product material had to be of the same high quality as the material used by dealers in other sales channels – keyword parity requirement. In the future, Amazon may only use the material for certain purposes. The parity specification is completely omitted. As a result, retailers will be able to use higher-quality or more specific product information and displays on other websites. According to the Bundeskartellamt, this change is intended to help suppliers compete with the Amazon marketplace by creating their own websites. The German Trade Association welcomes the changes: “It is good that the Bundeskartellamt has succeeded in ensuring fairer conditions between traders and the Amazon platform by initiating an abuse procedure,” says Peter Schröder, Head of the Legal and Consumer Policy Division at the HDE. “We are pleased for the smaller dealers that Amazon will act with a greater sense of proportion in its contractual relationships in the future”.

 

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Link: The Bundeskartellamt has achieved far-reaching improvements for dealers in Amazon marketplaces.

Image: Federal Cartel Office

//KH