Amazon has been told that its contracts for its marketplace for small business need to be changed to meet Australian rules.
Kate Carnell, the Australian Small Business and Family Enterprise Ombudsman, has written to Amazon to ensure the company complies with Australia’s unfair contract terms legislation.
Under Amazon’s US terms and conditions, the company reserves the right to refuse service, terminate accounts, terminate rights to use Amazon services, remove or edit content, or cancel orders at its sole discretion.
“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,” she says.
“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.”
The US online retail giant is building momentum, hiring more staff and establishing a fulfillment centre in Victoria, to pursue the retail dollar in Australia in a big way.
Last month Amazon announced its first Australian fulfilment centre in Dandenong South and the appointment of a country manager, Rocco Braeuniger, who was director of consumables at Amazon Germany.
Part of the big push, according to Amazon, is “opening up the opportunity for thousands of Australian businesses to sell at home and abroad through Amazon Marketplace”.
A spokesman for Amazon said: “We look forward to launching Amazon Marketplace in Australia and providing thousands of small businesses and entrepreneurs with tools and services that help them to reach millions of customers and to expand their businesses both here and abroad. We will, of course, adhere to all local laws in relation to our agreements with Marketplace sellers.”
Carnell says the pending arrival of Amazon Marketplace in Australia is an opportunity for many small businesses to compete online and extend their reach.
However, Carnell has reminded Amazon that it has an obligation to treat small businesses fairly in accordance with Australian law.
“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 though the Amazon platform.”
Carnell says analysis of the Amazon Marketplace contract suggests it needs to be changed in Australia to comply with federal legislation.
From November last year, changes to the Australian Consumer Law protect small business from unfair terms in standard-form contracts.
“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,” she says.
“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.”
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