Amazon’s New Terms of Service for Sellers: Paragraph 3: Amz Account Suspensions
The third paragraph of the new Participation Agreement discusses how Amz account suspensions will now be handled moving forward.
As far as the language goes, it seems better than it actually is. Some significant improvements have been laid out by Amazon for their sellers.
30 Day Suspension Notices
In the new Amazon Terms of Service (TOS), sellers are given a convenient 30 day advance notice before any account suspension is handed down. It sounds all well and good. You are given a month to resolve any issue before your seller account becomes suspended.
However, Amazon laid out 3 key points which they can use to justify a suspension without notification:
You have materially breached the Agreement and failed to cure within 7 days of a cure notice unless your breach exposes us to liability toward a third party, in which case we are entitled to reduce, or waive, the aforementioned cure period at our reasonable discretion.
Your Amazon seller account will be suspended if you have materially breached the Participation Agreement and failed to resolve it within 7 days after the receipt of a Cure Notice from Amazon. However, Amazon reserves the right to suspend you immediately, without the Cure Notice, if the breach exposed them to liability toward a third party. For example, if they are at risk of being sued because of the violation, then they can render the suspension right away.
Your account has been, or our controls identify that it may be used for deceptive or fraudulent, or illegal activity.
If you have been doing anything deceptive, fraudulent or illegal with your account, or Amazon believes you have, Amazon has the authority to suspend your seller account without the 30 day notice. However, if you are abiding by the rules, then there is no reason why you should be affected by the first two key points.
Your use of the Services has harmed, or our controls identify that it might harm other sellers, customers, or Amazon’s legitimate interests.
Amazon may suspend or terminate your use of any services immediately if they believe you may inflict harm on any of their sellers, customers or their legitimate interests. If you do anything they do not like, Amazon can simply revert to that provision and render the account suspension, without the 30 day notice.
Sending out a 30 day notice is a good step forward for a lot of sellers. Now, they do not have to worry about their accounts being frozen or their money not being transferred into their account. Sellers can no longer be arbitrarily suspended for an unknown reason without notification. Amazon is taking the right steps in the right direction. However, the 30 day notice does not apply to everyone. Amazon (at any time) may refer back to the third key point and tell you your products are harmful. Again, if this happens, they can automatically render a suspension, without the 30 day notice.
The best thing to do if you’re suspended is to send us a message.
Find out how we can help you effectively and efficiently. Send us all the information we need for us to write a decisive Plan of Action (POA). We may not be able to get your account reinstated right off the bat, but we can execute strategies that we have used in previous attempts to ensure that your seller account has the best chance of being reinstated.
Paragraph 3 Loopholes in the New TOS:
Amazon’s latest language in the Terms of Service / Participation Agreement / Business Solutions Agreement
The Business Solutions Agreement (BSA) is the controlling contract between every Amazon seller and Amazon. There are many people and companies that charge suspended sellers to write Plans of Action (POA) without knowing what the governing agreement is or what the terms of the contract mean.
Paragraph 3 of the Amazon Terms of Service is all about the Terms and Conditions as it pertains to Amazon sellers and obtaining suspended sellers’ reinstatement through the writing of a Plan of Action or Amazon Appeal. The prior Amazon TOS stated that any Amazon seller account could be suspended for any reason, at any time. Now, Paragraph 3 has changed that…. or has it? CJ Rosenbaum breaks down the new TOS.
Subsection A of Paragraph 3 contains a huge exception to Amazon’s new 30 day rule.
Subsection A states that Amazon will use “reasonable discretion” in making decisions. “Reasonable discretion” is legalese. If you had an intellectual property complaint asserted against your seller account and your account was suspended for a product you never sold, it seems “unreasonable” for Amazon to suspend. The new TOS creates gray areas and judgment calls on what is reasonable and what is not. You can argue suspensions are unreasonable when Amazon’s FBA team put a product back into your inventory after a return. It is unreasonable to harm a seller for an FBA error.
Material Breach: The first huge exception in the new Terms of Service is that Amazon can immediately suspend a seller or listing if Amazon thinks there has been a Material Breach of the TOS. There is specific law on what is “material” and what is “immaterial.” Identifying and arguing in your Plan of Action what is material or significant versus what is immaterial or insignificant will be vital for suspended Amazon sellers. Amazon fails to define what it means in terms of a Plan of Action. If suspended, you can argue and use Amazon’s new TOS to your advantage. Amazon’s New TOS provides time to “Cure.” Cure means to make it right. It does not mean turning back the clock and removing conduct. It is remedying it. Time to “cure” is the ability to fix the problem. If you were in material breach and cured as soon as you found out about it, you should be in compliance with the new TOS. The ambiguity in Amazon’s new TOS provides arguments for suspended sellers to assert in a Plan of Action.
Deceptive, fraudulent or illegal activity: In the second section of paragraph 3 of the new Amazon Terms of Service, Amazon retained a huge loophole where it will not provide advance notice to sellers. Here, if Amazon claims that you have been using your account for “deceptive, fraudulent or illegal activity,” Amazon will suspend you without 30 days notice.
This will then require a Plan of Action. Amazon does not clearly define what it means by “deceptive, fraudulent or illegal” activity. This failure to identify what “deceptive, fraudulent or illegal activity” refers to leaves the door wide open for Amazon to suspend without notice and also leaves the door wide open for creative arguments in Plans of Action and Amazon appeals if a seller is suspended.
For example, if a seller is accused of infringing on someone’s intellectual property rights, that is arguably illegal activity. Amazon may suspend the seller immediately. On the other hand, if there is no violation of any criminal law, then the seller did not, arguably, engage in any illegal activity. “Fraud” is a legal term and has legal significance. We can use the legal definition in Plans of Action to help get sellers reinstated. Amazon’s failure to identify who determines whether an activity is fraudulent, deceptive, or illegal is also both good and bad for sellers. It is bad because Amazon will suspend people / companies without any significant determination. Amazon’s failure to be clear is good for sellers because it leaves open many arguments to be made in POAs and appeals.
Amazon Claiming Harm: In the new Business Solutions Agreement, Amazon is getting around this well-publicized 30 day notice. We don’t know what “harm” means. Does that mean the $4.99 that people bought the toy with, is that the harm, or is it some type of physical harm? We have been successful in showing that Amazon cannot demonstrate any actual harm at all in arbitration. And we need to work that into our POAs because Amazon claimed in one case, they lost $2 million. How much did Amazon make the week before this occurred? I don’t have that number. How much has Amazon made the next week? Has Amazon made more money, week over week, quarter after quarter, for the last 10 years? The answer is consistently yes. So they can’t show any harm. So if Amazon’s claiming harm to it, I think that opens the door to a lot of persuasive arguments by using their own contract issues in your Plans of Action, which I think is a really good idea.
As a law firm, we can analyze the heck out of this contract and then find things that Amazon didn’t do on your account and use that in a POA to get you reinstated. Amazon is also reserving the ability to not tell sellers why they’re suspended. If we see Amazon telling sellers what the problem is in 20% of the suspensions, I think that’d be a great thing. I think it’s more unlikely that that will be, I think it’s more likely it’ll be very similar to the way it is now. It just sounds a little bit better the way it’s worded here. I think by them spelling out when you get notice and when you don’t, we can use that against Amazon in a persuasive way. Not like in a negative way, but in a really persuasive, positive plan of action that you should’ve been given notice because it was not a material breach. Amazon was not at risk of suffering any harm, so therefore you should have received notice. A lack of notice would mean that you got reinstated.
Please make sure you watch all of our videos regarding the loopholes Amazon created in the new TOS.
