Amazon warned to comply with Australian law

With Amazon set to enter the Australian market, the Australian Small Business and Family Enterprise Ombudsman has reminded the online retail giant that it must ensure it complies with Australian law.

Amazon Marketplace will provide small businesses with the opportunity to compete online and expand their customer base; however, they must be treated in accordance with Australia’s unfair contract terms legislation.

“Some businesses are concerned about the threat of competition while others are excited to embrace the opportunity that Amazon offers,” said Ombudsman Kate Carnell.

This reminder is a result of the way Amazon currently operates in the US, in which their terms and conditions state that the company reserves the right to refuse service, terminate accounts, remove or edit content, or cancel orders at its discretion.

“From 12 November 2016, changes to the Australian Consumer Law protect small business from unfair terms in standard-form contracts,” Carnell said.

She goes on to explain that a standard-form contract is prepared by one party, and 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.

Therefore, while Amazon has control over the termination of accounts on its end, the consumer does not possess the same power and it is this inequality that concerns Carnell.

“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 explained. “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.”