Ina Steiner EcommerceBytes Blog
News and insight focusing on ecommerce.
by Ina Steiner, Editor of EcommerceBytes.com
Tue Sept 22 2015 22:51:00

Do Marketplaces Take Liberties with Terms of Use?

By: Ina Steiner

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A debate is raging among artisan sellers over the Terms of Use agreements of Etsy and Amazon, which will soon launch the Handmade at Amazon marketplace. Should sellers be worried that marketplaces could turn around and compete with them?

Excerpt from Etsy's TOU:

By posting Your Content, you grant Etsy a non-exclusive, worldwide, royalty-free, irrevocable, sub-licensable, perpetual license to use, display, edit, modify, reproduce, distribute, store, and prepare derivative works of Your Content to provide the Services and to promote Etsy, your Etsy shop, or the Services in general, in any formats and through any channels, including across any Etsy Services or third-party website or advertising medium.

Excerpt from Amazon's TOU:
If you submit material, and unless we indicate otherwise, you grant Amazon a nonexclusive, royalty-free, perpetual, irrevocable, and fully sublicensable right to use, reproduce, modify, adapt, publish, translate, create derivative works from, distribute, and display such content throughout the world in any media. You grant Amazon and its sublicensees the right to use the name that you submit in connection with such content, if they choose. 

Sellers are very worried that Etsy and/or Amazon could be granting themselves the right to their designs and products and turn around and compete with sellers.

The same types of concerns have come up with eBay sellers over the years - in 2013, for example, Brian Cohen noted on the AuctionBytes Blog that eBay grants itself the right to sublicense any content a seller submits. He pointed out a third-party research tool that licenses seller product images from eBay and reproduces them in its own database.

Etsy also grants itself the right to sublicense users "content" in its terms of use.

While Amazon has a similar provision but uses the term "materials" rather than "content" in its terms of use.

See more about this issue in Wednesday's Newsflash newsletter, and let us know what you think. Do Etsy and Amazon overreach in their terms when it comes to licensing provisions? Is one user agreement better or worse than the other?




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Perminate Link for Do Marketplaces Take Liberties with Terms of Use?   Do Marketplaces Take Liberties with Terms of Use?

by: Owen This user has validated their user name.

Wed Sep 23 00:24:15 2015

I think this is very scary. You have individual sellers, most of whom are not trained in the law, pitted against teams of high priced corporate lawyers who make their living writing obfuscating language into their Terms. These high priced corporate lawyers are not there to protect small sellers, at all. They are there to address the interests of the corporation who pays their salaries. You would have no rights. And unless you have extremely deep pockets, you stand to lose everything you worked so hard for. This should worry handmade sellers a great deal, especially if you have a great idea and no patents on it, or inadequate patents on it.  

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This user has validated their user name. by: Rexford

Wed Sep 23 06:59:22 2015

I'm in the process of having manufacturers in Canada and in China manufacture an item from my original artwork.  Amazon's wording would stop me in my tracks if I were considering listing there.  Even sending an item for manufacture in China concerns me and right now I'm only ordering a sample.

Artisans beware!  I believe that legal agreements are purposely written so that they are difficult to understand. Amazon need to put this into layman's terms.

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by: mcposty This user has validated their user name.

Wed Sep 23 11:11:10 2015

What part of all these corporations are criminals do you not understand?

There needs to be a mass exodus from these venues, they literally destroy the online economy as they toy with it and control it.

Lets go back to having individual websites, and have centralized searches amongst them.

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This user has validated their user name. by: iheartjacksparrow

Wed Sep 23 11:22:25 2015

This reminds me of the scene in the movie Phantom of the Paradise, where Winslow signs over his life to Swan, and the contract he signs reads:

"The party of the first part gives the party of the second part and his associates full power to do with him at their pleasure. To rule, to send, to fetch, or carry him or his, be it either body, soul, flesh, blood or goods."

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by: Owen This user has validated their user name.

Wed Sep 23 15:54:35 2015

All I can think of is Shark Tank. You have 3-4 shark-type, possible investors, (can't remember how many) pitted against small entrepreneurs, who get torn apart like nobodies business. Something like the ancient Roman Coliseum. Sometimes they make it, sometimes, they don't. Then, if they get chosen, there are all kinds of negotiations, and things which they have to agree to. They lose their proverbial soul to market their item. Presumably, Shark Tank has some terms in place to give contestants some measure of protection. But, I am not sure about that.

Multiply this stress by about 100, with shark attorneys for Amazon, possibly co-opting small handmade, seller's ideas, to sell them to a manufacturing company, for Amazon's gain. The only difference is that you, the seller, have agreed to give your rights away to Amazon. You would have no rights.

Maybe Amazon will agree to do the right thing and change their terms for this handmade adventure, so they do not injure small handmade sellers. Perhaps, it is an unintended consequence. Or maybe not.

Better protect yourself, until this is sorted out.

And, I hope, Etsy, that could do a similar thing, will come up with some protection in writing for their sellers, that makes it crystal clear, that they will not do such a thing.

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This user has validated their user name. by: Ming the Merciless

Wed Sep 23 20:18:50 2015

Until and unless the government intervenes or major lawsuits are filed, these greed driven venues will continue to grant themselves the "right" to steal from their customers at will.

Thi is like the power company saying they have the right to use and/or appropriate anything in your home because you're using (and paying for) the power they produce.

This type of grossly overreaching "user agreement" wouldn't be tolerated in the non internet world.

These venue have no ethics whatsoever, and many of their policies violate laws.

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This user has validated their user name. by: Shop and Ship

Wed Sep 23 23:47:58 2015

Clearly the Etsy paralegal web school drop-outs have misconstrued the concept of "illusory contracts" that aren't worth the paper they're not written on. Any "agreement" that one party can modify, amend, or nullify at will is not a contract at all; it's a hoax.  

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by: Tiffee Jasso This user has validated their user name.

Thu Sep 24 02:19:51 2015

Legally, you do sign your rights away. That is what the wording states. I am pretty sure if you were to go before a judge, you would be told you agreed. Now whether that agreement is binding without a signature and a disclosure clause telling you in plain language what is meant, is a story that will be told in the future.
As for folks stealing your designs for Asian marketing, you will probably not be able to stop that even if it is Amazon, Ebay or Etsy behind the distribution. Have you not seen how Coach and all the other brand names are counterfeited and sold by the millions. Those companies have only been able to halt the mass counterfeit sales in the European Market where laws are strict and fines stiff. In the US you are left hanging high and dry, other than the tears of frustration running down your face. Our government could care less what scams are used to bilk citizens on the internet.
That said, until these online venues actually put it in writing they demand your soul, there will be lines out the door to sign up.
We live in a money rules and nothing else matters world that we all support, like it or not.  

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by: Watching the Wheels This user has validated their user name.

Thu Sep 24 03:56:23 2015

Read any venue TOU. They are all similar with any given seller signing away any reasonable legal protection form the get go.

They are more self serving than any of the credit card agreements were before the government intervened.

In order to sell on any venue the individual is first stripped of any rights.

Instead of sellers continually whining about all the other stupid things that venues do, people NEED to start bringing the original TOU to the attention of the powers that be,

I/m sure the government would be willing to throw some support behind the sellers. The filthy rich of cyber land are acquiring too much power.

OH, but then again, most of you allowed yourselves to be puppeted out by the shirts when the government WAS TRYING TO REIGN THE GREEDY BASTARDS IN ON THE COPYWRITE STUFF. When was that, last year?

Rexford, are you an American?

Do you have a problem with helping your own countrymen? How can you even consider giving away some more money to China? TRAITOR!

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This user has validated their user name. by: Rexford

Thu Sep 24 06:58:32 2015

Watching the Wheels says "Rexford, are you an American?"

Yes I am, and if you will find me even ONE vendor who can manufacture what I need I will happily get a quote and sample the quality. What I need requires a several step manufacturing process and as of now I haven't found anyone in America manufacturer who does this.

You know, before you jump to conclusions that someone might be anti-American manufacturing you might want to check the labels on the products in your own home. Also check the components of items you own--I'm guessing that if you drive a car or use a mobile phone the parts in both come from a variety of global destinations.

And name calling?  LOL  Keeping it classy!

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This user has validated their user name. by: RKTOYS

Thu Sep 24 08:41:04 2015

Deja vu.  I remember several years ago, after the Yahoo purchase of GeoCities, a clause like this was put into their TOS.  The result was a lot of original content being pulled from GeoCities pages.

@Rexford
It is nothing if not a practically vertical fight.  Just finding manufacturers is hard.  Finding one that will answer inquiries is even harder and finding one that will actually do it is harder still.  As much as I wish whatever you were making was made here, sometimes it just can't be helped.

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This user has validated their user name. by: Rexford

Thu Sep 24 09:01:46 2015

RKTOYS, every point you made is exactly what we have encountered and I'll add quantities and billing to your points. Some don't even want to deal with you unless you want 50,000 widgets.  And with offshore manufacturers, many want you to do bank transfer or "send money" PayPal option without sending you an PayPal invoice.  No thanks.  

Thank you for being a voice of reason here and making factual statements as opposed to jumping to conclusions.

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This user has validated their user name. by: Shop and Ship

Thu Sep 24 09:14:43 2015

Thanks again for the "free legal advice" but I prefer the paid kind researched by experienced consumer trial lawyers. The mere act of writing your name on an illusory contract is by definition part of the illusory status. And the mere fact that you were duped, intimidated, desperate, or ignorant is just further evidence of how lopsided the bargaining positions really were. While you're busy pondering your plaintiff status, puzzle me this: how is it that none of these yahoos ever files suit to enforce their illusory contracts against their millions of pitiful victims? The congressional hearings on eBay and PayPal's flaunting of the no-call legislation just means that more extensive regulation of the Internet is becoming more popular and inevitable.  

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This user has validated their user name. by: Shop and Ship

Thu Sep 24 10:27:19 2015

Remember "Blockbuster Video"? Many believed that its Draconian "membership terms" gave it carte blanche to run up late fees, charge credit card accounts, and have its customers arrested for "theft" for not returning videos. Local courts took a different view, and in time as word spread that the "Membership Contracts" were unenforceable Blockbuster's inventory was depleted. That, and other marketing issues like NetFlix, Red Box, and streaming video caused its marketing plan to become obsolete, but the legal point remains: The Emperor Has No Clothes.  

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by: Robin This user has validated their user name.
Web Site

Thu Sep 24 11:12:29 2015

Sadly, Ina, you dropped the ball.  THE question to pose to Amazon was why they do not define what "materials" are, and why they will not define it in their TOU so that the "worst case scenario" readers of those TOU can KNOW exactly what they ARE and AREN'T agreeing to.  

You just asked for a quote. Too bad.

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by: Massachusets Howler This user has validated their user name.

Thu Sep 24 15:19:03 2015

Rex,
I have an invention too- USE MEXICO- NOT China brother.
(Working on the provisional patent)?

The provisional that you must have for at least 1 year will not protect you in China, but it MAY in Mexico.

Take a TRIP (and write it off) to mexico! Factories all ON the border and you can use trucked freight.
The Chines actually have manufacturing boats- ships off the coast of Europe during fashion week- in 2 hours they are MAKING copies right off shore- can you trust a country where this is the norm- MEXICO- take advantage of the NAFTA.
They will steal your idea and make millions of copies of YOUR invention- you will see your invention ON ebay before you produce a single one!
And Ebay will be warehousing and distributing YOUR product for THEM.
Peace,
(I would LOVE you to do it, and maybe then you could loan me a little money).
:-)
MB (Mexico- a short walk from San Diego and a semi-democratic government).

Perminate Link for Do Marketplaces Take Liberties with Terms of Use?   Do Marketplaces Take Liberties with Terms of Use?

by: Massachusets Howler This user has validated their user name.

Thu Sep 24 15:24:40 2015

From AMZ's terms it looks like they are almost as bad as China- no new provisional patent items on AMZ either.
MH
AMZ needs a lesson on ethics too, but I do like their seller rating system much better than ebays. The only reason ebay didn't copy amazons seller rating system is that it would interfered with ebay showing their big box buddies.
MH

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This user has validated their user name. by: Rexford

Thu Sep 24 15:25:40 2015

Mass Howler, will likely go with the Canadian manufacturer, but will definitely take a look at Mexico.  Mexico is not known for manufacturing what I need, but definitely worth a look.  Thank you for the tip.

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by: Massachusets Howler This user has validated their user name.

Thu Sep 24 15:27:07 2015

Good Rex- rootin for ya!
MH

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by: Massachusets Howler This user has validated their user name.

Thu Sep 24 15:35:37 2015

Piper Jaffrey just downgraded Paypal to a SELL.

This is the 1st SELL in years for either ebay or PP so this is significant.

They are setting a target OF $30 for Paypal!!

Major,
MH

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