With the advent of e commerce and e commerce giants, the law has been forced to change and adapt. With a giant e commerce retailer like Amazon, many of the “legal shots” are called by Amazon itself, who is protected from many legal issues by law and their own “business solutions agreement” that every third-party seller adheres to when they open an Amazon seller account. This means many of the “bad actors,” the cutthroat competitors who will stoop low to conquer their online competition, often go unpunished, while, at the same time, many legitimate products are restricted and prohibited because of the actions of other “bad actors.” Some of the most common legal situations which never see the inside of a courtroom are whether a product can be legally sold online and whether a product infringes another seller’s intellectual property.
Is this product legal?
Amazon has its own internal system for determining whether a product is restricted by law to be sold or not. Oftentimes, they misinterpret the regulations or take a legal position that is just plain wrong, which can not only stop a best-selling product from being sold, but crush entire ecommerce businesses.
For example, the seller support division at Amazon which is responsible for determining whether a product is legal to be sold online or not often misses the mark completely. I have had literally dozens of clients who have had their products removed from sale because they are classified as “medical devices” which must be “FDA approved,” when in they are exempt from FDA approval and even from premarket registration under Regulation 510(k). As a result, an ecommerce seller who has done his or her homework and made a signficant investment in a product which is perfectly legal to sell online, may have their doors shuttered due to an Amazon clerk’s or worse yet, a robot’s misinterpretation of the law.
Amazon has an internal department who takes copyright, trademark and patent infringement complaints and often removes products from sale and even suspends entire ecommerce stores based on lies from cutthroat competitors. From outright lies of competitors who knock their competition out of the ballpark by claiming the copyrights to images which Amazon must remove under the DMCA to unwarranted patent claims, to bogus trademark claims, a seller can easily become a victim of a ruthless competitor who uses Amazon’s Kanagaroo Court to knock their product or store into cyber-oblivion. Competitors will also “cry wolf,” posing as customers making counterfeit claims. Enough of these claims will cause Amazon’s AI to pop out a counterfeit alert, which means the seller is guilty until proven innocent while the fate of their store or product hangs in Amazon suspension.
Kenneth Eade is a lawyer who helps ecommerce sellers through an international website, www.amazonsellers.attorney