Amazon has been reminded that it must treat small business fairly and lawfully as the online giant prepares to enter Australia.
The reminder comes from Australian Small Business and Family Enterprise Ombudsman Kate Carnell.
Ms Carnell said that although the Amazon Marketplace was an opportunity for many small business to trade online, the company must comply 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,” Ms Carnell said.
“For consumers the Amazon Marketplace promises to expand choice and put downward pressure on prices.
“I’m interested to see how Australian small businesses can accelerate sales and broaden their customer base through the Amazon platform.”
Ms Carnell said analysis of the Amazon Marketplace contract terms in the United States suggested they would have to be changed in Australia to comply with federal legislation.
“From 12 November 2016, changes to the Australian Consumer Law protect small business from unfair terms in standard-form contracts,” Ms 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.”
Ms 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.”