Amazon Seller News: Section 3 Cases on the Rise
At Amazon Sellers Lawyer, we have recently seen a rise of sellers being suspended under Section 3 of Amazon’s Business Solutions Agreement (BSA). Even though these are high-level enforcement actions, sellers can appeal their suspension and return to selling on the platform with well-made appeals. In this article, we walk through common causes, recent trends, and case data for Section 3 suspensions.
Section 3 of Amazon’s Business Solutions Agreement
Section 3 of Amazon’s BSA outlines the rights that Amazon has to terminate your ability to sell products on their platform. Usage of Section 3 on sellers is generally reserved for those who repeatedly violate other clauses of the agreement, or for more extreme cases such as those involving fraudulent activity. The most common cases for Section 3 suspension that we see are:
- Illegal Activity: Typically involving the sale of counterfeit products or extensive Intellectual Property (IP) infringement.
- Customer Complaints: If multiple customers receive materially different or unsafe products, Amazon may escalate to Section 3 suspension.
- Unverified inventory: When Amazon cannot confirm the authenticity or authentication for your inventory.
- Related Accounts: Violation of Amazon’s policy regarding operating multiple accounts.
Depending on the nature of a Section 3 suspension, Amazon may hold your inventory and freeze the funds on your account. These can be devastating actions for sellers who operate on smaller margins and need consistent cash flow to maintain manufacturer sourcing.
Creating appeals for Section 3 suspensions requires making an Amazon Plan of Action (POA). Compared to a typical suspension case, Section 3 appeals require more thorough appeals to address the reason for the suspension and also how your business plans to prevent future violations – even if you are innocent.
Recent Trends of Amazon Section 3 Cases
We have seen a rise in Section 3 threats and suspensions in recent months, with Amazon having new requirements for compliance. Particularly, Amazon has increased the number of cases where they request video verification of inventory. The most common reason given for requesting a video review is that Amazon’s enforcement team is looking into your inventory because of allegations that you are selling counterfeit products. With rising IP enforcement, these reviews are one example of how the enforcement team is looking to crack down on independent sellers.
Amazon Sellers Lawyer Recent Case Trends
In two recent Amazon Sellers Lawyer case victories, we have seen these video calls used by Amazon’s enforcement team and seen their results. Our first client reached out to us immediately after receiving the warning about Section 3 enforcement if they failed to comply with the video review. We helped prepare them for the call, but afterwards they continued to receive requests that proved they were not selling counterfeit products. Our team prepared a detailed appeal that showed our client’s innocence, ending the investigation and letting them go back to focusing on selling products.
The second client reached out to us after being suspended for Section 3 violations. We helped them prepare a POA appeal, after which Amazon’s enforcement team requested a video call for verification. Unlike the previous case, completion of the video review led to the suspension being lifted and the investigation was ended.
What we learned from these cases is that compliance with video reviews is important for sellers under investigation, but it does not guarantee that the investigation will end afterwards. The difference maker is still your ability to craft compelling POAs which show hard evidence of your innocence.
Amazon Lawyers To Help With Your Section 3 Suspension
At Amazon Sellers Lawyer, we are constantly adjusting our strategies to keep up with how Amazon changes theirs. Our team includes former Amazon enforcement employees who know what triggers suspensions and how to appeal them and they are ready to help you navigate your Section 3 case. Contact us today through our online form or at 212-256-1109.
About the Author
CJ Rosenbaum, Esq.
CJ Rosenbaum is the founding partner of Amazon Sellers Lawyer. He’s been practicing law since 1995, and since 2016 his firm has focused exclusively on Amazon sellers – issues like suspensions, intellectual property disputes, and love inventory.
CJ has written six books on Amazon seller legal issues including the Amazon Sellers’ Guide to Copyright Law. He has spoken at major industry events like the Prosper Show, Global Sources Summit, Retail Global. CJ also works with the Amazon Sellers Lawyer team to provide free content for Amazon sellers. This is available through their online blog and YouTube channel, frequently covering major Amazon updates and important topics relevant to the seller space.
Through BrandProtectionAmazon.com, the firm also supports brands in protecting their products. This gives the team the unique opportunity to learn from case wins on both sides of the fence, strengthening protection for both the sellers and brands that Rosenbaum & Segall P.C. represents.
Amazon repeatedly rejecting your Plan of Action? Amazon Sellers Lawyer handles suspension appeals and account reinstatement cases – including arbitration against Amazon when they’re withholding seller money. Contact us to discuss your situation and figure out the best path forward.