Amazon Marketplace needs to review contract terms, says Ombudsman

With the pending arrival of Amazon Marketplace, the Australian Small Business and Family Enterprise Ombudsman wants to make sure the retail giant conducts its business within the Australian law.

Ombudsman Kate Carnell says the platform represents an opportunity for many small businesses to compete online and extend their reach, as long as it treats small businesses fairly.

“Some businesses are concerned about the threat of competition while others are excited to embrace the opportunity that Amazon offers,” she says.

“For consumers the Amazon Marketplace promises to expand choice and put downward pressure on prices.

“I’m interested to see how Australian small businesses can accelerate sales and broaden their customer base through the Amazon platform.”

In the US, Amazon’s terms and conditions include the right to refuse service, terminate accounts, terminate rights to use Amazon services, remove or edit content, or cancel orders at its sole discretion, however, these will have to be changed to comply with Australian federal legislation.

“From 12 November 2016, changes to the Australian Consumer Law protect small business from unfair terms in standard-form contracts,” Carnell explains.

“A standard-form contract is one that has been prepared by one party and where the other party has little or no opportunity to negotiate the terms.

“An unfair term is one that causes a significant imbalance in the parties’ rights and obligations and causes detriment to a small business if it were applied or relied upon.

“This may be considered unfair as action can be taken by one party, Amazon, but not the other party, the vendor, to terminate the contract.

“I’ve requested that Amazon review the terms and conditions in use for standard form contracts in its Australian operations to ensure they comply with the unfair contracts terms legislation.”

By Marion Gerritsen