If you are an Amazon seller, for sure, you have questioned and searched Amazon’s Terms of Services. Perhaps, you even debated it in some conversations among sellers, “You cannot put an exclamation in your title, this is against the ToS of Amazon.”
When thinking about “ToS” (a.k.a, Terms of Service), most people mistakenly think only about the Programme Policies. However, getting to know the real Terms of Service Agreement that you have with Amazon will give you huge leverage when dealing with the platform, especially, when your account has the risk of being suspended or terminated. This article will cover the initial general clauses (Recital – Clause 3) stipulated in the General Terms of the “ToS”.
For the sake of not taking an hour of your time, for now we will only focus on the European Agreement. Although the American agreement is similar to this one, do not take any word for granted and check the relevant provisions. Further, even though it is not super complex, do not overestimate its clauses. In plain English, if you are having any problems inside the platform that requires, for instance, a Plan of Action, please contact a legal professional to help you, and do not rely only on this simple piece of information. We do not have the intention, and we are not giving any legal advice.
In hopes to avoid being too technical and legal, but still getting the correct information across, let’s review basic terminology:
So, our friend ToS has the official name of “Amazon Services Europe Business Solutions Agreement”, and it includes the following service “bundles”: “Selling on Amazon”, “Fulfilment by Amazon”, “Sponsored Ads”, and “Selling Partner API” – A big family!
Our suggestion is for you to download the latest version of the Amazon Service Europe Business Solutions Agreement (last update in August 2022) and read this article alongside the agreement. The Agreement has 38 pages total; however, we will only cover some clauses of the General Terms, leaving us with around 3 pages of information. We will not go paragraph-by-paragraph, so there will be excerpts not mentioned here. They will be analyzed in future articles.
“The version of this Agreement in English is the definitive legal version. Translations into German, French, Italian, Spanish, Dutch, Swedish, Polish and Chinese (中文) are available for your ease of reference only.”
The agreement starts by mentioning that the definitive legal version of it is in the English language. This may seem a bit irrelevant, but it is not. There are many ambiguities and contradictions throughout the contract, so when exploiting one of them in a POA, or on your communications with Amazon, please, make sure that your interpretation is also possible in its English version. (We highly recommend you do a Plan of Action (POA) with a legal professional).
“THIS AGREEMENT CONTAINS THE TERMS AND CONDITIONS THAT GOVERN YOUR ACCESS TO AND USE OF THE SERVICES THROUGH A PARTICULAR ACCOUNT OR ACCOUNTS AND IS AN AGREEMENT BETWEEN YOU OR THE BUSINESS YOU REPRESENT ("YOU") AND AMAZON SERVICES EUROPE S.A R.L (THE "AGREEMENT"). BY REGISTERING FOR OR USING THE SERVICES, YOU (ON BEHALF OF YOURSELF OR THE BUSINESS YOU REPRESENT) AGREE TO BE BOUND BY THE TERMS OF THIS AGREEMENT, INCLUDING THE SERVICE TERMS AND PROGRAMME POLICIES FOR EACH SERVICE YOU REGISTER FOR OR USE IN CONNECTION WITH A PARTICULAR AMAZON SITE.”
The second paragraph of the recitals may be a bit scary. With everything in caps lock, you might have the impression that they are screaming at your face. And indeed, they are. This paragraph is MASSIVELY important because Amazon wants to make sure WHO are the PARTIES bound by this contract.
“It is an agreement between you or the business you REPRESENT and Amazon Services Europe”.
Amazon extends the scope of the rights and duties set forth in the contract; it is encompassing people that perhaps are not even representing your business. The central idea to retain is that if you use the services of Amazon, you are, at least, tacitly, agreeing to be bound by the terms outlined in the document.
Because of that be careful with authorizations inside the platform. Although there are spaces in which Amazon tries to move away from this idea of not binding everyone that uses its services (e.g, the part in the “Account Information” tab where it mentions “Person of Contact”), everyone using the platform is agreeing to this ToS, even if they don’t know it exists. Amazon is careful to include the Service Terms and Programme Policies of each Service Term (they included the express reference to the Programme Policies in the last amendment in April).
“If there is any conflict between these General Terms and the applicable Service Terms and Programme Policies, the General Terms will govern and the applicable Service Terms will prevail over the Programme Policies.”
The last paragraph of the recital states the hierarchy that exists inside the Amazon Services Europe Business Solutions Agreement. The General Terms are the “canonical” texts for any question arising between you and the provided services. It is followed by the specific Service Terms, and lastly by the Programme Policies. They are one of the elements that contain the provisions regulating your relationship with Amazon. Knowing them is essential for a healthy performance inside the platform.
“As part of the application, you must provide us with your (or your business') legal name, Primary Place of Business address, phone number and e-mail address, as well as any other information we may request.”
The only relevant excerpt of paragraph 1 is regarding the limitless requesting power Amazon has. They can literally inquire about any information whatsoever from you (as long as it is not unreasonable, or illegal). This can be highly problematic: imagine that Amazon requests a utility bill from your business entity. There will be many sellers that do not have it (e.g – sellers who live with their parents, sellers who have a Virtual Office, etc).
Furthermore, this clause can raise some problems for first-time Sellers on the platform that do not have any historical data to support its legitimacy. Despite its controversiality, the provision is in force.
Our advice is: since the beginning of the business verification, double-check every document sent to Amazon, especially being careful with the names matching in all of them. So, be diligent. For example, if the business account will be created for your American company, do not send the certificate of incorporation of your English company, or your holding company. If you do not raise any red flags, Amazon will have fewer reasons to suspend your account. PS: Amazon has started requesting documents such as company charts; therefore, if you have a corporate structure with more than one company, be ready for describing it to Amazon. We consider this a very good practice from Amazon. It helps especially sellers that have multiple accounts to get “whitelisted”, preventing them from potential suspensions.
“You will use only a name you are authorized to use in connection with a Service and will update all of the preceding information as necessary to ensure that it at all times remains accurate and complete.”
We find this stipulation highly beneficial for the Sellers. It helps solve two types of issues:
Let’s tackle the first one. Many sellers are redistributors of non-native Amazon brands. If that’s your case, know that you can protect yourself from possible deactivation of your account as long as you can prove to Amazon that you were entitled to use the relevant brand in your Seller account in the first place. Here you want to find letters of authorization, contracts, etc. In a nutshell, you should present anything that shows to Amazon a legitimate use of the brand name.
Regarding the multiple accounts inside the Amazon platform, let’s use an example: you are a seller (Company A) that was doing well, so well, that you decided to acquire another Amazon native brand (Company B) so that you could expand your product line. You were both in Europe and decided to do a SPA (i.e, a Share Purchase Agreement); therefore, you are now the owner of two companies: A and B. Will you need to do a “transfer of account inside Amazon”? The short answer is no. What you will need to do is to change the relevant information inside the Company B account, as the beneficial owner and bank account details.
If Amazon, by any chance, suspends your account, you can argue that you are entitled to do those changes. In fact, you are performing an obligation of the contract, because:
From our experience, the best practices in the case of a SPA are:
You can use this same argumentation in the cases of Asset Purchase Agreement; however, bear in mind that in those, you will need to mandatorily press the “transfer account” button. We will not cover the transfer account agreement here in this article.
Probably one of the most important and controversial clauses in the agreement. There are many changes from its past versions, and if you are dealing with account suspension/ deactivation issues, you will likely need to refer to this clause in your POA. It is a bit more complex, so we will examine all parts of it:
“The term of this Agreement will start on the date of your completed registration for use of a Selling Service and continue until terminated by us or you as provided below.”
Not much to say. It is the introductory part that sets how the termination will be governed, i.e, it is “provided below”.
“You may at any time terminate your use of any Selling Service immediately on notice to us via Seller Central, email, the Contact Us Form, or similar means. We may terminate your use of any Services or terminate this Agreement with at least 30 days’ advance notice (a) if we stop or restrict the provision of any Services in relation to the FR Amazon Site or (b) if you have violated the Agreement including any Program Policies or (c) in compliance with the applicable rules of civil law on the termination of a contract as this Agreement is entered into for an indefinite period.”
The first sentence describes your unilateral right to terminate the agreement at any time and the exact moment of the notice.
On the other hand, Amazon must respect a 30 days advance notice if it wants to terminate the Agreement with you, then it lists the respective situations which are the foundation for the termination. The most common one will be case (b). Although Amazon sets forth this limitation, there are many exceptions to it, which we will check now.
“We may terminate your use of any Services immediately: (a) to exercise a right of termination under an imperative reason pursuant to national law which is in compliance with European Union law; (b) where you have repeatedly infringed this Agreement; or (c) if we are subject to a legal or regulatory obligation which requires us to terminate the provision of the services in a manner which does not allow us to respect the notice period”
These are the exceptions in which Amazon can terminate the agreement unilaterally IMMEDIATELY.
It is interesting to see that Amazon is shifting its modus operandi from terminating to suspending. We can check that by looking at the new sub-paragraph that deals exclusively with suspension situations (besides the fact that Amazon removed Case D of immediate termination to a case of immediate suspension in the platform).
“We may suspend your use of any Services immediately: (a) where you have materially breached this Agreement and failed to cure within 7 days of a cure notice unless your breach exposes us to liability towards a third party, in which case we are entitled to reduce, or waive, the aforementioned cure period; (b) where you have repeatedly infringed this Agreement; (c) if you have violated a legal or regulatory obligation or failed to comply with a legal or regulatory obligation; or (d) in case of illicit or inappropriate content, concern with the safety of Your Product, counterfeiting, fraud, malware, spam, data breaches, other cybersecurity risks or suitability of your Product to minors.”
First different terminology inside clause 3: Termination vs Suspension.
Amazon clearly makes a distinction between the aforementioned notions, but why?
Certainly, from a seller’s point of view, the difference is notorious: with the second one you are on the bench of the game, and with the other, you have been expelled from it. However, for the ToS, it makes a huge difference. In the case of a termination, Amazon will give advance notice to you (unless an exception is fulfilled); in the case of a (regular) suspension, there is no advance notice obligation for it.
Amazon does not even list the cases of regular suspensions (“regular” because it is not imperious, and therefore, it is not urgent). It creates a lot of ambiguity and broadens its power to suspend Sellers for whatever reason (but they must be laid out, at least, in the programme policies).
"We will promptly notify you of any termination or suspension via email or similar means sent to you individually, and on Seller Central, indicating any options to appeal and the reason, except where we are subject to a legal or regulatory obligation not to provide the specific facts or circumstances or the reference to the applicable ground or grounds for that termination or suspension, or where you have repeatedly infringed this Agreement. "
One of the main problematics of this subparagraph deals with the expression “indicating any options to appeal and the reason”. Sellers in Amazon, that wrote POA before, know that the reason is hardly well founded. As sellers, you want to sell the products, and sell them in the right way. Notification of policy violations should not be regarded as a bad thing (its idea is to improve the selling experience in the platform, and therefore, your product lifecycle); nevertheless, it is frequent to see sellers complaining about the lack of indications from Amazon regarding the reason of violation itself.
How should you address something when you do not know what policy, specifically, you violated? This is a possible defense strategy in case you are suspended for not addressing the reason properly; perhaps, you did not have the possibility of doing that either because there was no reason, or because it was too broad in order to specify the exact violated policy.
One last head’s up:
When drafting your PoA take special attention to this subparagraph: “Any suspension will last until you have provided satisfactory evidence that you have cured its cause and implemented the necessary changes.” You must show Amazon that you not only solved the problem; you must show Amazon that this problem will not occur in the near future because you implemented resources (e.g, an internal SOP) to prevent it from happening.
And we will leave it here for this one! If you are interested in learning more about Amazon legal topics, make sure to subscribe to our newsletter below to get a notification when we post our next legal article on the main clauses of your contract with Amazon and how you can defend yourself from a possible policy violation, or in the case of a suspension/termination, how to address it properly. Do not forget to contact a professional before drafting your POA on Amazon.
Junior Paralegal
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