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ASBFEO advises Amazon on local SME protection obligations

The Australian Small Business and Family Enterprise Ombudsman has written to e-commerce company Amazon to ensure the company complies with Australia’s unfair contract terms legislation upon its arrival.
Ombudsman Kate Carnell said the pending arrival of Amazon Marketplace in Australia represented an opportunity for many small businesses to compete online and extend their reach, though she took the opportunity to remind the company of its 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,” said Carnell.
“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 said analysis of the Amazon Marketplace contract terms in the US suggested they would have to be changed in Australia to comply with federal legislation.
“From 12 November 2016, changes to the Australian Consumer Law protect small business from unfair terms in standard-form contracts,” she said.
“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.”
Carnell said in 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 said.
“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.”

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