Bye Buy Box

On July 17th, 2019, Amazon announced that they would be making changes to their Business Solutions Agreement. The changes took affect August 16th. According to Amazon, the changes were based on feedback from sellers. Many insiders reported that the changes pertained to antitrust claims Amazon is facing from European marketplaces. Others noted the changes were related to intellectual property infringement claims and account suspensions. Amazon provided a summary of the changes.

Summary of Changes

General Terms “Introduction”

Amazon is clarifying seller contractual obligations by defining a discrete set of Program Policies.

Section 3 “Term and Termination”

Amazon is adding more specific information about account suspension and termination and they are providing a right to appeal such actions in certain circumstances.

Section 4 “License”

Amazon is narrowing the scope of the limited license sellers give them to their intellectual property.

Section 6 “Indemnification”

The obligation to indemnify will apply mutually to both parties.

Section 15 “Modification”

Amazon will provide advance notice when they modify the BSA, except where needed to protect customers.

Section S-3.2 “A-to-z Guarantee”

Amazon will provide an express right to appeal their A-to-z determinations.

Section F-7 “Returns to You and Disposal”

Amazon revised the procedure for refusing, removing, or disposing of FBA inventory.

”Selling Partner API Terms”

Amazon streamlined the terms for their selling partner APIs, including Marketplace Web Services (MWS), distinguished the different terms that apply to sellers and developers, and clarified permissible uses of those APIs.

Between the Lines

These changes do relate to antitrust and IP infringement claims. However, we found the changes to the "Discrete set of Program Policies" noted in bullet #1 to have the most impact on brands. More specifically, the section on "Product and Listing Requirements" includes changes to "Amazon Marketplace Fair Pricing Policy". This revision states that Amazon regularly monitors the prices on their marketplace and others. If they feel there is a price that jeopardizes customer trust they can remove the buy box.

Amazon regularly monitors the prices of items on our marketplaces, including shipping costs, and compares them with other prices available to our customers. If we see pricing practices on a marketplace offer that harms customer trust, Amazon can remove the Buy Box, remove the offer, suspend the ship option, or, in serious or repeated cases, suspending or terminating selling privileges.

This all comes less than a month after Amazon released their Amazon Assistant Extension. The extension is designed to help consumers compare prices on other websites to Amazon's. However, in the fine print, Amazon said the extension collects your browsing history and what’s on the pages you view. This type of information could be useful, especially if you wanted to monitor prices on other websites to ensure yours was the most competitive.

What's even more interesting is that last week Amazon launched a new program called Sold By Amazon (SBA). The program lets Amazon control third-party product prices in exchange for a minimum payout to sellers. This is similar to previously launched programs like "Discount Provided by Amazon" that offer discounted prices at Amazon's expense. Although this promotes competitive pricing on Amazon's website, what does it mean for brands?

It's clear that having the lowest price on the web is a priority for the online retailer. However, at what cost does this come for brands? Over the past several weeks we've discovered successful strategies that maintain buy box and client SRP. If you're experiencing pricing issues, we can help.