Amazon amends its terms for third-party sellers, pushed by the German regulator

Bundeskartellamt, the competition regulator from Germany, yesterday announced conclusions of the abuse of dominance proceedings against Amazon, initiated in November 2018. Andreas Mundt, President of the Bundeskartellamt, said the proceedings are now terminated and Amazon is amending its terms of business for sellers on Amazon’s online marketplaces.

“In conclusion of our proceedings, Amazon will adjust its terms of business for sellers active on its marketplace for the German marketplace amazon.de, for all European marketplaces (amazon.co.uk, amazon.fr, amazon.es, amazon.it) and marketplaces worldwide including those in North America and Asia. 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,” said Andreas Mundt, President of the Bundeskartellamt.

In 2018 more than 300,000 third-party sellers were active on the marketplace amazon.de. Amazon.de is therefore by far the largest of the Amazon’s five marketplaces in Europe. Of all five European marketplaces, the German marketplace accounts for 40-50 percent of the volume of sales, followed by the British and then the other three marketplaces (amazon.fr, amazon.es, amazon.it).

Bundeskartellamt began the dominance proceedings into Amazon’s Marketplace after receiving complaints from sellers.

What will change?

There will now be a limitation in Amazon’s exclusion of liability in favour of the sellers. The terms will also be more narrowly defined. In the future Amazon will be liable to the same extent as sellers for intent or gross negligence for any breach of major contractual obligations.

As yet Amazon has had an unlimited right to immediately terminate and block sellers’ accounts without justification. In the future an ordinary termination of an account will require a 30 days’ notice. In the case of an extraordinary termination (based on the alleged legal infringements by a seller) and the blocking of a seller’s account, Amazon is now obliged to inform the seller and provide reasons for such measures.

Until now Luxembourg was specified as the only court of jurisdiction in the European terms of business applying to the marketplace as well as in the European terms of business for payment transactions. This provision made it difficult, in particular for smaller sellers, to even attempt to seek legal action. The exclusivity of Luxemburg as the only court of jurisdiction is now removed from the terms of business for all European marketplaces. Under certain conditions, domestic courts can be the competent court of jurisdiction in future.

So far sellers have had to unilaterally bear the costs and other consequences of a decision by Amazon to reimburse the customer. If they consider that the return was unjustified, they can pursuant to the new rules object it and are entitled to compensation from Amazon pursuant to the new regulations.

Until now sellers were only allowed to make public statements about their business relations with Amazon with Amazon’s written prior approval. This clause will now be significantly reduced.

Amazon being investigated in Austria, Luxembourg and by the European Commission

During the proceedings, the Bundeskartellamt maintained contact with the European Commission, which this week opened an antitrust investigation against Amazon.

The Bundeskartellamt says that also held discussions in particular with the competition authorities in Austria (Bundeswettbewerbsbehörde) and Luxembourg (Conseil de la concurrence), as these regulators are also conducting abuse proceedings and investigations against Amazon.