Guest blog post by Corey J. Rosenbaum of Amazon Sellers’ Lawyer
As the senior partner in a law firm that focuses on Amazon sellers, it is astounding how many sellers have never heard of the Business Solutions Agreement or “BSA.” When I speak to sellers around the world, the contract that pertains to sellers comes up. Sellers almost invariably refer to their agreement to sell on Amazon as the “Participation Agreement” or the “Terms of Service.”
Even though I have lectured to and met with sellers from New York to Shenzhen, China and my law firm provides advice to sellers and for accounts in over twenty-two countries, I have yet to hear any seller, large or small, refer to the correct agreement that governs their Amazon sellers’ account.
The agreement that governs your seller accounts is called the Business Solutions Agreement. Amazon sellers are not, necessarily, governed by the Participation Agreement or “Terms of Service.”
Why Are Sellers Under the Business Solutions Agreement instead of the Participation Agreement?
When it comes to US accounts, when a seller opens his or her account you register as an “Amazon Professional Seller” and as you click through the process you accept what is referred to as the “agreement”. The “agreement” is the BSA. Every US seller agreed to be bound by its provisions. Or did you?
Question: If I never knew the BSA existed, am I still bound to the agreement?
The answer to the question about what agreement governs the relationship between Amazon and Amazon sellers probably is: the Business Services Agreement probably governs.
The Business Services Agreement probably governs the relationship between Amazon and Amazon sellers because when each Amazon seller clicked through the sign on process, you agreed to do business under Amazon’s “agreement”. The reference to the Business Services Agreement is located in the definitions’ section. Specifically, the Business Services Agreement can be found under “seller agreements.”
However, the fact that the agreement is a bit hidden could provide a mechanism for challenging the enforceability of the agreement. If the agreement were challenged in court, I would likely retain the services of a pollster or other professional akin to a census taker to determine what percentage of Amazon sellers know that the BSA exists. An expert in website design would be helpful to provide testimony that the agreement is hidden.
On the other hand, Amazon would likely argue that the BSA applies and governs because it was “incorporated by reference” by each and every Amazon seller when he or she signed up to sell on the Amazon platform. This means that even though the BSA is a hidden, it is referred to in the materials and thereby governs.
The BSA versus the Participation Agreement
First, without even reading it, the BSA is much longer than the Participation Agreement. The BSA is forty-six pages long while the Participation Agreement is only about a third of that length. Generally, the Business Services Agreement is broader and provides more benefits to Amazon and more restrictions and waives for sellers.
Arbitrations for Recouping Selling Privileges When Amazon Refuses to Reinstate Your Account
Vital to sellers is the right to take Amazon to arbitration is you are suspended and Amazon refuses to reinstate your selling privileges.
Most sellers live in fear of receiving the Amazon suspension email. When it is received and there are no intellectual property right issues, suspended sellers must submit a Plan of Action to seek reinstatement. If the Plans of Action are denied, suspended sellers can then seek a reversal of the denial via their Appeal button or via emailing Amazon’s policy teams. If the policy teams do not reinstate your account, suspended sellers can then seek reinstatement by writing to the Jeff Bezos Escalation Team. If the Escalation Team continues to refuse to reinstate a suspended seller, that seller can take the decision out of Amazon’s hands and seek an order directing Amazon to reinstate the account by binding arbitration.
Interestingly, Amazon includes the arbitration clause in both the Business Solutions Agreement and the Participation Agreement….Amazon clearly does not want to be sued in traditional courts by its sellers.
In a case called Peters v. AMAZON SERVICES LLC, 2 F. Supp. 3d 1165 (W.D. Wash. 2013), the history of Amazon’s agreements was explained. In sum, before 2011 only the Participation Agreement governed the relationship between Amazon and Amazon sellers. Starting in 2011, the Business Solutions Agreement was added when people and companies that wanted to sell on Amazon clicked through the sign-up process.
Amazon’s Ability to Alter the Agreement at Any Time at Amazon’s Sole Discretion
As many advanced sellers know, Amazon seems to hold all of the cards until a suspended Amazon seller seeks arbitration. While the following is from the Business Solutions Agreement, but both agreements contain similar language.
The Business Solutions Agreement says that Amazon
“…may amend any of the terms and conditions contained in this Agreement at any time and at our sole discretion. Any changes will be effective upon the posting of such changes on Seller Central or on the applicable Amazon Site, and you are responsible for reviewing these locations yourself of all applicable changes or notices. All notice of changes to the General Terms and the Service Terms will be posted for at least 14 days. Changes to Program Policies may be made without notice to you. You should refer regularly to Seller Central to review the current Agreement (including the Service Terms and Program Policies) and to be sure that the items you offer can be offered via the applicable Service. YOUR CONTINUED USE OF A SERVICE AFTER AMAZON’S POSTING OF ANY CHANGES WILL CONSTITUTE YOUR ACCEPTANCE OF SUCH CHANGES OR MODIFICATIONS.”
A few points:
- Any changes will be effective upon the posting of such changes on Seller Central or on the applicable Amazon Site
- you are responsible for reviewing these locations yourself of all applicable changes or notices
- All notice of changes to the General Terms and the Service Terms will be posted for at least 14 days
- Changes to Program Policies may be made without notice to you
- You should refer regularly to Seller Central to review the current Agreement (including the Service Terms and Program Policies)
Amazon sellers assume that the agreement is enforceable. Amazon sellers assume that Amazon holds all of the cards. However, there are substantial legal issues pertaining to the one-sided agreement that may take some of the control away from Amazon.
First, when an Amazon seller takes Amazon’s refusal to reinstate out of Amazon’s hands, they file for arbitration. The arbitration is held, under the agreement, with the American Arbitration Association. Often the arbitrator is a lawyer, sometimes the arbitrator is not.
When the arbitrator is a lawyer, that person was taught that one-sided agreements are unenforceable. Its basic Contract Law taught to every single lawyer in the US. Arbitrators in Amazon seller disputes with Amazon, sometimes enforce the one sided agreement and sometimes do not.
When the arbitrator is not a lawyer, Amazon sellers can also argue fairness and also point out to the arbitrator that one-sided agreements are not enforceable. In fact, if you were to bring every single textbook on Contract Law and every study guide and copies of cases, it would be a truck-load of material that could be used to convince any arbitrator that the contract is unenforceable.
What Agreement Governs and Does it Matter to Amazon Sellers
When an Amazon seller has an issue, the last thing a suspended Amazon seller wants is to increase their dispute. Suspended Amazon sellers want to get back to selling. At the end of the day, in most situations the agreement doesn’t matter because both agreements are one-sided, both agreements provide for arbitration and both are likely to fail when sufficiently challenged.
