Amazon's Australian Launch Could Face Legal Trouble

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Amazon was contacted by The Australian Small Business and Family Enterprise Ombudsman today, just checking in to make sure the online retail giant complies with Australia's unfair contract terms legislation. Apparently, the company's contract terms might not be legal in Australia.

"Some businesses are concerned about the threat of competition while others are excited to embrace the opportunity that Amazon offers," Ombudsman Kate Carnell said, saying the Australian launch of Amazon is a reminder for small businesses to "compete online and extend their reach".

Carnell also wants to remind Amazon that it has "an obligation to treat small businesses fairly in accordance with Australian law".

Amazon Marketplace contract terms would have to be changed from the US version to comply with Australian Federal legislation, Carnell says.

"From 12 November 2016, changes to the Australian Consumer Law protect small business from unfair terms in standard-form contracts," Carnell 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 United States 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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