Amazon made sweeping changes to its terms of service for third-party sellers this week in an effort to address an issue that’s plagued the biggest piece of its e-commerce business.
As part of a settlement it reached with German antitrust authorities over its marketplace policies, Amazon said it will now give a 30-day notice to sellers facing suspensions and provide specific reasons to those who are blocked for “alleged legal infringements.” Until now, Amazon could terminate seller accounts at any time “without justification,” according to the agreement announced by The Federal Cartel Office of Germany.
But sellers and marketplace experts who have become all too familiar with Amazon’s increasingly cavalier approach to suspensions are worried that the changes, set to go into effect globally on Aug. 16, don’t go far enough to protect merchants from having their business suddenly disrupted, or even decimated, without recourse.
“It’s a good step forward, but the update fails to address some of the root cause issues around the suspension problems,” said Peter Kearns, a former Amazon Marketplace manager who now works for 180Commerce, providing consulting and strategy services to third-party sellers.
The marketplace has been a blessing and a curse for Amazon since the company flung open its doors to many more outside sellers around the world, particularly from China. Third-party merchants now account for 58% of items sold on Amazon, up from 31% a decade ago, and produce higher margins than Amazon’s retail model, because sellers pay for all sorts of services, like storage, shipping and advertising, and keep Amazon from having to spend so much on inventory.
“Third-party sellers are kicking our first party butt,” Amazon CEO Jeff Bezos wrote in his annual shareholder letter this year.
But with millions of new sellers sourcing products from tons of unvetted manufacturers, counterfeits have flooded the marketplace, leading to a swarm of infringement claims. As Amazon has cracked down on the counterfeit problem by aggressively suspending abusers, many honest sellers have gotten kicked off as well, and Amazon has been unable to manage the deluge of complaints.
Germany’s antitrust office wrote in the agreement that it looked into the suspension problem mainly because “numerous sellers complained about the unsubstantiated and surprising cancellations and resulting loss of turnover.” U.S. regulators haven’t taken specific action, but presidential candidates, including Sen. Elizabeth Warren (D-MA) and Sen. Bernie Sanders (I-VT), have publicly criticized the company for having too much market power, and European Union officials recently launched an antitrust investigation into Amazon’s business practice regarding third-party sellers.
Seller anecdotes of wrongful terminations are not hard to find. For example, CNBC previously reported that one seller got suspended after a fake law firm filed a false complaint, while another seller was attacked and wrongfully suspended by a competitor calling himself the “virus of Amazon.” Last year, a small business called Cheapskates Liquidators was suspended because of incorrect claims that it sold inauthentic items and, in trying to get reinstated, the company entered a dark hole of unresponsiveness.
In the updated agreement shared with third-party sellers on Wednesday and viewed by CNBC, Amazon included a red-lined version that compares the old and new language. Here’s the most relevant part to suspensions:
Old version: “We may terminate or suspend this Agreement or any Service for any reason at any time by notice to you.”
New version: “We may terminate your use of any Services or terminate this Agreement for convenience with 30 days’ advance notice. We may suspend or terminate your use of any Services immediately if we determine that (a) you have materially breached the Agreement and failed to cure within 7 days of a cure notice unless your breach exposes us to liability toward a third party, in which case we are entitled to reduce, or waive, the aforementioned cure period at our reasonable discretion; (b) your account has been, or our controls identify that it may be used for deceptive or fraudulent, or illegal activity; or (c) your use of the Services has harmed, or our controls identify that it might harm, other sellers, customers, or Amazon’s legitimate interests. We will promptly notify you of any such termination or suspension via email or similar means including Seller Central, indicating the reason and any options to appeal, except where we have reason to believe that providing this information will hinder the investigation or prevention of deceptive, fraudulent, or illegal activity, or will enable you to circumvent our safeguards.”
Chris McCabe, a former Amazon employee who now helps sellers get reinstated and stay compliant, said he’s encouraged by the update but still needs to see how it’s implemented. The 30-day notice will give sellers more opportunity to respond to unfair suspensions and make their case, but the rest of the language is vague and gives Amazon plenty of leeway, he said.
“They need better training and to be more specific in terms of reason and causality around the suspensions,” McCabe said.
Much of McCabe’s time is spent helping sellers file their appeals for reinstatement and finding the right person inside Amazon to actually see the documentation because so many of the processes are automated and the system is overwhelmed. Slow response times and the lack of awareness that employees have about specific violations result in small businesses losing revenue at critical times of the year, like the holiday season or Prime Day. Furthermore, Amazon’s suspension notices often don’t provide specific remedies, making it difficult for sellers to understand the corrective actions they need to take.
In an emailed statement, an Amazon spokesperson said the updates are intended to “clarify selling partner rights and responsibilities.”
“These changes allow Amazon to continue to protect our customers and selling partners from abuse, while making explicit our practice of providing notice and offering a path to appeal our decisions for sellers who believe we’ve incorrectly taken action against their accounts,” the company said.
In online seller forums, merchants have voiced their complaints about issues like a lack of clarity in emails from Amazon representatives and low levels of engagement. One seller, who was suspended for violating a little known pricing policy, wrote about the frustrating nature of the appeals process. Email correspondence between Amazon and another suspended seller shows how challenging it is to dispute certain allegations.
Then there’s Amazon’s reliance on imperfect technology. Amazon’s automated system, driven by machine learning algorithms, often flags non-violations, creating “false positives,” especially when there are dirty tricks involved like a competitor trying to take down a higher-ranked seller, according to Jerry Kavesh, an Amazon seller and consultant. The changes don’t mention those issues or how to address them, he said.
“Currently, appealing false positives go into a black hole, and even if they’re resolved, they stay on your account as a black mark,” Kavesh said. “Too many sellers can get their account suspended even though they’ve done nothing wrong.”
Kearns of 180Commerce said the updated language still gives room for unexpected account terminations. Even with the 30-day notice requirement, Amazon said in the new agreement that it could suspend accounts “immediately” under certain conditions, like if a seller engages in illegal activity or harmful conduct. While there are logical reasons for Amazon to maintain that right, it can leave sellers who were attacked by rivals in a helpless position.
“It still has that level of ambiguity that Amazon can just say, ‘We think you’re doing something wrong and we’re going to shut you down,'” Kearns said. “In this case, you’re guilty until you can prove you’re innocent.”
Pru, Acqua, Suay, Wagyu, Anise
The image of Phuket as a cut-price destination for backpackers and budget-conscious retirees is long out of date.
Phuket has now become a favorite vacation destination for the world’s wealthiest individuals, many of them arriving on super-yachts.
Yachts are becoming a common sight in Phuket.
It started when the Amanpuri resort opened and spearheaded the island’s upmarket transformation. Anthony Lark was the founding general manager at Amanpuri, before setting off in 2004 to create Trisara, one of the poshest resorts on the island.
Over the past 16 years at Trisara, Lark has taken care of a host of bold-faced names — Kate Moss, Roger Federer, Tom Jones, Kylie Minogue, members of U2 and Maroon 5. And he has watched Phuket evolve to cater to a choosier clientele.
“The changing culinary scene has been driven by supply and demand,” Lark said. “When I first got here, it was all pad Thai noodles, green curry and grilled fish on the beach. There were a few good Italian restaurants but absolutely no demand for fine dining, so that category simply didn’t exist.”
Pru’s jampa salad, which includes 15 different ingredients grown on the restaurant’s farm, is topped with a passion fruit vinaigrette.
Courtesy of Pru
Phuket wasn’t on super-yacht owners’ radar 20 years ago, said Lark, whereas today, five marinas have been built to cater to them.
“There were maybe a dozen million dollar holiday homes on Phuket,” said Lark of the 1980s. “Now, there are 150 villas worth in excess of that sum.”
“That’s brought a customer with higher, more exacting demands.”
Phuket earns its first Michelin star
In 2016, Trisara opened Pru — a restaurant specifically aimed at catering to the tastes of nomadic foodies and wealthy travelers.
An acronym for “plant, raise, understand,” Pru is a creative farm-to-table establishment that sources many ingredients from its own 96-hectare organic farm.
Black kingfish, sourced from the Andaman Sea, is paired with organic beetroot sorbet and house-made mulberry vinegar.
Courtesy of Pru
Young chef Jimmy Ophorst, who came to Phuket from the Netherlands nearly eight years ago, was rewarded for his efforts when Pru won a Michelin star — the first to be awarded to a restaurant on Phuket — on the inaugural 2019 Thailand list. Retaining the accolade in 2020, Pru remains the only Michelin-starred restaurant on the island.
“It’s unbelievable the impact winning a Michelin star has had on me as a chef, and on this restaurant,” Ophorst said.
Duck egg, charred eggplant, locally-sourced abalone and wild herbs.
Courtesy of Pru
“I’ve never worked in a Michelin-starred restaurant before in my life,” he said. “From the moment we won it, the restaurant has been full — many people tell me they’ve come to the island just to dine with us.”
Ophorst said when Pru was opened, a key goal was to make Phuket the second-best dining destination in Thailand, after Bangkok. He said the level of cuisine has grown a lot since Michelin started looking at restaurants on Phuket.
“There are so many good chefs here, I’m sure we can get plenty more stars on the island.”
A decade of decadence
Ten years ago, there was little in the way of upscale dining outside the big hotels. Now, there are many independent restaurants doing brisk business.
Sardinian chef Alessandro Frau’s modern-Mediterranean Acqua Restaurant is the bookmakers’ favorite to be the next Phuket spot to secure a star.
Acqua’s smoked Sardinian eel and pickled vegetables in a white balsamic vinegar sauce.
Courtesy of Acqua.
But an array of others is quietly vying for the attention of Phuket’s discerning gourmands. For example, Suay Restaurant in the upscale northwest neighborhood of Cherngtalay serves creative, modern Thai.
Suay Restaurant earned a spot in the Michelin Guide 2020.
Courtesy of Suay Restaurant
British-run Bampot specializes in contemporary European cuisine, alongside excellent cocktails. Exquisite Italian is served at the lilliputian (just six tables) La Gaetana. Carnivores are catered for at Twin Palms’ new Wagyu Steakhouse — unimaginative name, but unbelievable meat.
High-end southern Thai food at Anise.
Courtesy of Anise
Despite Phuket’s increasingly upmarket positioning, it’s still possible to enjoy an incredible meal here for a humble sum. Even Lark has deviated from his traditional high-luxury lane to launch a new value-focused restaurant, Anise. Its proposition: simple, beautiful, authentic Thai food served in an elegant space at affordable prices.
“Phuket’s culinary scene has now done what Bali did in the 1990s,” said Lark. “It’s grown up.”
Bollywood’s Deepika Padukone’s battle with mental illness, depression
Bollywood star Deepika Padukone has spoken out about her battle with depression, calling for greater public discussion to help tackle the mental health crisis.
Padukone, who is one of India’s highest-paid actresses, said her experience during a seeming “professional high” revealed the illness’ indiscriminatory nature and inspired her to campaign for other sufferers.
“Mental illness crept up on me when I least expected it,” Padukone said last week.
“The perception and the general understanding was that I was at a professional high,” she said last Tuesday at the World Economic Forum in Davos, Switzerland. “But what I was also experiencing was this hollow, empty, pittish feeling … I would just cry out of nowhere.”
Padukone was diagnosed with depression in 2014.
The 34-year-old celebrity, who has over 30 movies to her name, said she considered herself lucky that her mother had spotted her symptoms and urged her to seek medical help.
However, she noted that stigma and lack of awareness surrounding mental illness can make it difficult for sufferers to reach out. In India alone, an estimated 7.5% of the population suffers from some kind of mental illness, according to the World Health Organization, yet provisions remain scarce.
That inspired Padukone to set up the Live, Love, Laugh Foundation in 2015 to support other sufferers. The charity aims to spread awareness of mental health issues, having launched India’s first national campaign, as well as working to help people reach diagnoses.
Learning to understand what she was experiencing was the first step to recovery, Padukone said. She encouraged potential sufferers and the people around them to look out for telltale signs of depression, such as prolonged feelings of sadness, sleeping and eating irregularities, as well as suicidal thoughts.
“The toughest part in the journey for me was not understanding what I was feeling,” said Padukone. “Just having the diagnoses in itself felt like a massive relief.”
Padukone was speaking at the WEF meeting — a gathering of global business leaders and policymakers — where she was honored with the 2020 Crystal Award for her contributions to mental health awareness.
In 2018, she was named as one of Time magazine’s 100 most influential people of the year.
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More US service members diagnosed with brain injury after Iran missile attack
A picture taken on January 13, 2020 during a press tour organised by the US-led coalition fighting the remnants of the Islamic State group, shows a view of the damage at Ain al-Asad military airbase housing US and other foreign troops in the western Iraqi province of Anbar.
Ayman Henna | AFP | Getty Images
A total of 50 U.S. service members suffered traumatic brain injury from this month’s Iranian missile attack on Iraqi bases hosting American troops, the Pentagon said Tuesday.
Of those TBI cases, which can include concussions, 31 were treated in Iraq and have returned to duty, Pentagon spokesman Lt. Col. Thomas Campbell said in a statement.
Last week, the Pentagon said there were 34 service members diagnosed with concussions and traumatic brain injuries.
Of the 16 new diagnosed cases, 15 service members have returned to duty in Iraq, Campbell said.
Iran launched ballistic missiles at two bases in Iraq housing American troops on Jan. 8 local time. The strike was in retaliation for the U.S. killing of Iran’s Gen. Qassem Soleimani, who was commander of its elite Quds Force, in a drone attack outside Baghdad’s airport less than a week before.
No one was killed in Iran’s strikes, and a day after targeting U.S. forces, President Donald Trump said that no one was hurt or killed.
Chief Pentagon spokesman Jonathan Hoffman has said that a lot of TBI symptoms are late developing and manifest themselves over a period of time.
The Centers for Disease Control and Prevention says on its website that some symptoms of concussions and other traumatic brain injury can appear right away, but other symptoms may not be noticed for days or months after the injury.
One of those new cases involved a service member transported to Germany for further evaluation and treatment, bringing the total taken there to 18. That person had been taken to Germany “for other health reasons and has since been diagnosed with a TBI,” Campbell said.
Last week, another Pentagon spokesman said that eight U.S. service members who were sent to Germany were then taken to the United States.
Campbell’s statement Tuesday said that there was no information as to whether anyone else has returned to the U.S.
A service member that had been taken to Kuwait for treatment has since returned to duty, Campbell said.
Hours after Iran launched missiles against U.S. forces, Iran’s armed forces shot down a Ukrainian passenger plane that departed from Tehran’s airport, in an incident that Iranian officials blamed on “human error” and which Iran’s president has called an “unforgivable mistake.”
All 176 people aboard Ukraine International Airlines Flight PS752 were killed, including many Iranians and Canadians.
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