The Federal Government’s small business watchdog is concerned about how Amazon may treat local suppliers when it lands and has warned the e-commerce giant that many of its US policies may be illegal Down Under.
Analysis conducted by Australia’s Small Business and Family Enterprise Ombudsman, Kate Carnell, has found that Amazon may have to change its marketplace contract terms to comply with Australian law.
In the US Amazon reserves the right to refuse service, terminate accounts, terminate rights to use Amazon services, remove or edit content and cancel orders at its sole discreation.
“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,” Carnell 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.”
Carnell said local suppliers have mixed emotions about Amazon’s entry, with some concerned about the threat of competition and others excited to embrace the opportunity.
“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,” she continued.
A spokesperson for Amazon said it will ensure it complies will local regulations.
“We look forward to launching Amazon Marketplace in Australia and providing thousands of small businesses and entrepreneurs with tools and services that help them to reach millions of customers and to expand their businesses both here and abroad. We will, of course, adhere to all local laws in relation to our agreements with Marketplace sellers,” a spokesperson said.
Amazon has already begun to bed down partnerships with local FMCG suppliers, with interest having already been shown by Victorian fresh-food supplier DandyFresh in embracing the opportunity.