California legislation de-fanged, gives no relief to Amazon sellers

By Published On: September 17, 2019Comments Off on California legislation de-fanged, gives no relief to Amazon sellers

As predicted, the California legislation will not make Seller Performance any friendlier

This summer, optimistic Amazon sellers believed there was change in the air. Amazon made changes to its Business Solutions Agreement (see our previous blog post), and the California legislature began work on a bill that purported to protect sellers from abusive online marketplaces.
Over the last few weeks, as the updated Business Solutions Agreement (BSA) has come into force, it’s unfortunate that my predictions have come true. As I suspected, nothing has really changed in Seller Performance and its actions toward sellers – at least not that anyone on the outside can see. It’s not kinder, it’s not gentler, it’s not more responsive, and there are no 30-day cure notices, as the BSA said there would be.

Also as predicted, the California legislature’s AB-1790  has been watered down to a point that it means almost nothing. The most recent version of the bill strikes out the few provisions that I truly believed would have a positive impact for sellers. At the same time, it’s clear that someone (an Amazon lobbyist?) explained “risk management” to the legislature, as there are now provisos to protect every step of the investigation and enforcement processes in Seller Performance.

outline of california, representing new legislation

Striking out the good

One provision originally in the bill said it would “prohibit a marketplace from destroying products in its possession that are the property of a marketplace seller without offering the marketplace seller a reasonable opportunity to retrieve the marketplace seller’s property.”

That language was struck out completely, however, from the most recent version of the bill.
Why? I’m speculating. But I believe this was far too broad, as it would allow bad actors to place removal orders for counterfeit or stolen goods. The legislation refused to wade further into the devilish details by saying something like, “a reasonable opportunity to retrieve authentic, legitimate goods.” I suppose they believed it would take too much work to define “authentic” or “legitimate,” so they just abandoned the hard work altogether.
Unfortunately, I’ve seen far too many deactivated sellers have their inventory seized and destroyed – even when they attempted to place removal orders and were selling legitimate goods. This will continue to be an uphill battle.

Embracing risk management

The legislature added many provisos to the bill, essentially giving Amazon and other marketplaces complete power to implement their current risk management structure. For example, a section initially said when a marketplace suspended a seller, it then had to provide a “written statement of reasons” including “the specific facts and circumstances that led to the decision.”

Check out the revised version. It now says the written statement of reasons must do this: “Without disclosing information that would result in the disclosure of any proprietary, confidential or trade secret information, or disclosing information that would hinder any investigation or prevention of deceptive, fraudulent, or illegal activity, describe the facts and circumstances that led to the decision unless the marketplace reasonably believes that giving a written statement of reasons could negatively impact the safety or property of another user or the marketplace itself.”

In other words, Amazon doesn’t have to tell you anything. And the word “specific” was removed. So your suspension notice will be generic, just like they always have been.

Another section has Amazon’s fingerprints all over it. The past language stated that the marketplace must “identify the terms or conditions that permit the suspension or termination.” That has been changed to “identify the term, condition, or policy that serves as the basis for the suspension or termination.” This is the same-old same-old, but now California’s legislature is adopting specific language that recognizes what has always been – Amazon’s policies have the force of contract law with sellers. In other words, third-party sellers will see no improvement or relief.

What does it all mean?

Just as the changes to the BSA made very little positive difference to Amazons sellers, the California legislation will have little to no positive effects. The only question I have at this point is what it means for those sellers whose accounts are frauded. Let me explain. Sometimes, Amazon designates an account as “frauded” because Amazon suspects one of a wide range of fraudulent activities has occurred. This can be anything from money laundering to buying/selling fake gift cards to violating laws about overseas ownership, and more.

In these rare cases, the account is closed with no notice whatsoever. The seller cannot login, and there is no appeals process in place. Sometimes, we can get these accounts reinstated if the fraud designation was made in error (yes, it happens – twice in the last month at Riverbend, in fact!). But it is an extremely tough uphill battle.

Under the new legislation, Amazon would have to provided frauded California sellers with a reason for their account’s deactivation. Don’t be surprised if this provision disappears down the memory hole by the time the next version of the bill is considered.

Have more concerns about the California legislation?  Riverbend Consulting navigates online retail. Get your Amazon account reinstated, sell with confidence, and increase your bottom line. Contact us.


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