Online marketplaces such as Amazon and eBay, and online app retailers such as Google Play and Apple’s App Store are increasingly a primary channel of revenue for goods resellers and software app developers. However, sellers whose accounts have been suspended, terminated, or otherwise disabled may find themselves without legal recourse to challenge actions that can significantly affect their livelihood.

Why Would a Seller Account Be Suspended or Terminated?

In the simplest terms, a seller account will be disabled for a perceived violation of the applicable Terms of Service. However, anyone who has bothered to actually read those Terms likely realizes that the Terms usually say that the marketplace website can terminate an account for just about any reason or for no reason (although they usually do not exercise that right). In addition, these providers generally do very little in the way of policing their own marketplaces to find violations or other issues. In reality, seller accounts generally are not disabled because the marketplace owner has some issue; rather, they are disabled because someone else has complained to the marketplace owner. However, these complaints can be problematic for the marketplace owners.

It’s Not You, It’s Me

The most common type of complaint that results in a seller account being terminated or disabled is an accusation of some type of copyright infringement or trademark infringement related to the goods or apps being sold. The natural response is to deny any infringement, and while this response is perfectly appropriate in other contexts, it unfortunately accomplishes little in the context of a disabled seller account.

The reason largely comes back to the Digital Millennium Copyright Act. The DMCA creates certain “safe harbors” or limitations on liability for online providers that host the content of others. Basically, the marketplace has no affirmative duty to police its site looking for acts of infringement, and the marketplace cannot be liable for acts of infringement by its users unless it either has actual knowledge of infringement and fails to take remedial action or if the site, as a whole, does not have a “reasonably implemented repeat infringer policy.” In other words, the marketplace can be held responsible for infringing content if they ignore complaints about infringement. So, as much as Amazon may not want to get involved in a dispute between two sellers, they have to do something if infringement is mentioned.

Your Laws Are No Good Here

The strangest part about negotiating issues of online infringement disputes on these marketplaces is that, although the DMCA safe harbors are largely the cause of disabled accounts, Amazon and other marketplaces generally choose to selectively follow the DMCA. The DMCA sets forth a very specific protocol for infringing third party content: the content owner must notify the service provider of the infringement through a “takedown notice,” then the service provider must disable access to the content and notify the person that posted it, and then the person that posted the content can send the service provider a “counter-notification” stating that the content is not infringing. Under the DMCA, the service provider is supposed to reinstate access to the disputed content after receiving a counter-notification unless the content owner provides proof that it has filed an infringement lawsuit.

The recent trend among online marketplaces is to ignore this framework entirely. Although the marketplace will typically take some action in response to an accusation of infringement, often disabling an account, they generally refuse to reinstate content or the disabled account in response to a counter-notification. Rather, they have taken the position that the account was disabled under their Terms of Service (which, remember, allows them to suspend or terminate an account for any reason or no reason) and that the reinstatement provisions of the DMCA therefore do not apply. This, of course, turns the entire framework of the DMCA on its head, creating instead a “guilty until proven innocent” system that potentially enables one seller to take out the competition by making accusations of infringement.

Negotiating with a Broken Record

To make matters worse, disabled account holders routinely find it impossible to have a discussion about their situation with the marketplace. The reason is that, Amazon, Apple, and other marketplaces are not employing attorneys trained in copyright and trademark issues to discuss these issues with sellers. Rather, the marketplace representatives that are responsible for processing infringement complaints and disabling accounts are basically call center technicians with no understanding of the issues who respond to every communication with a copied script. Typically, sellers are unable to speak to a manager or a representative of the marketplace’s legal department to address their concerns.

Can’t We All Just Get Along?

So what is the owner of a disabled seller account supposed to do? Unfortunately this system—where the marketplace will disable accounts based on unsubstantiated complaints, then take the position that they can terminate for no reason, and then refuse to discuss the issue intelligibly—leaves sellers with precious few options. However, the approach that most sellers instinctively take is, unfortunately, often the wrong one. Many sellers respond to a disabled account by staunchly defending their actions, asserting that there is no infringement, and demanding reinstatement of the account. This approach rarely yields any results, and usually just results in another form response from the marketplace’s representative.

This is because the marketplace is less concerned about whether there is any infringement (and they don’t want to have to make that call anyway) and more concerned about the accusation of infringement, which creates potential risk for the marketplace under the DMCA. Accordingly, although sometimes negotiating with the marketplace can be helpful, in most cases the best approach is to find a way to get the party that initially complained to withdraw their complaint; to withdraw the accusation of infringement. What Apple, Amazon, eBay, and Google really want to happen when they send a notice of accused infringement is not to receive an explanation of why the content is not infringing; they want the notice to be withdrawn so that they can’t be accused of not having a “reasonably implemented repeat infringer policy.”

Therefore, although a seller ought to acknowledge the complaint and respond to the marketplace, the most important avenue of negotiation is with the person that complained. These negotiations are not always easy of course, but this is what the marketplace secretly wants sellers to do when their accounts are disabled, and in many cases, negotiating with the party that submitted the complaint is the only way to get a suspended or terminated account reinstated.

Posted in: Business Law, Internet

  • Contact Us

    Contact Form

  • Phone