Amazon amends seller terms worldwide after German antitrust action

Amazon has agreed to make a raft of changes to the business terms it offers sellers on its marketplaces following an intervention by Germany’s Federal Cartel Office (FCO).

The regulator instigated an investigation in November last year after receiving a large number of complaints from sellers pertaining to Amazon’s German marketplace, The largest of the company’s five European marketplaces.

Among the changes the ecommerce giant has agreed to make are amendments to its liability provisions towards sellers to bring it into line with European standards for b2b relations, and changes to account termination and blocking to remove its unlimited right to do so without justification — meaning ordinary account terminations will in future require 30 days notice.

In a statement, Amazon said:

We are making several changes to the Amazon Services Business Solutions Agreement to clarify selling partner rights and responsibilities. The changes will become effective August 16th. 58% of the physical gross merchandise sales on Amazon are from third-party sellers, and we’ll continue working hard, investing heavily, and inventing new tools and services to help our selling partners around the world reach new customers and grow their business.

The company has also agreed to remove exclusivity of court of jurisdiction, meaning European sellers with a dispute against it may not only be able to instigate legal proceedings in Luxembourg but could, under certain conditions, be able to take it to a domestic court in future.

Other changes include reductions to confidentiality requirements Amazon has used to bind what sellers can say about it in public; product information rights and quality requirements; and over product reviews and seller ratings.

The new business terms, which will come into effect in 30 days times, will apply not just to all Amazon’s European marketplaces but also to its marketplaces worldwide, including in North American and Asia.

In a press release detailing what the FCO bills as the “far-reaching improvements” it has obtained in Amazon’s terms for sellers, it confirms the amendments conclude its proceedings against the company.

“The amendments address the numerous complaints about Amazon that the [FCO] received from sellers,” said president, Andreas Mundt, in a statement. “They concern the unilateral exclusion of liability to Amazon’s benefit, the termination and blocking of sellers’ accounts, the court of jurisdiction in case of a dispute, the handling of product information and many other issues.

“With our proceedings we have obtained far-reaching improvements for sellers active on Amazon marketplaces worldwide. The proceedings are now terminated.”

Also today Reuters reports that Austria’s regulator has also dropped a separate competition investigation of Amazon’s business as a result of the amended business terms.

Despite settling probes by EU Member States, Amazon is still facing antitrust scrutiny in the region, with the European Commission today announcing a formal investigation of how it handles merchant data.

The pan-EU competition regulator has the power to levy major fines if it determines the bloc’s rules have been broken, as well as to order a cessation of any infringing behavior — backed by the threat of additional fines for continued violation.

The FCO notes it refrained from placing further requirements on Amazon regarding the rules for product reviews in today’s settlement in light of this ongoing Commission inquiry, as well as in view of a current sector inquiry it’s conducting into online user reviews. So there could be further changes to Amazon’s terms coming down the pipe as a result of ongoing investigations. 

New EU rules intended to regulate the fairness and transparency of online platform businesses are also looming — and likely concentrating minds at Bezos HQ — having been agreed by EU institutions earlier this year.

The platform regulation will likely come into force across Europe before the end of next year.