Liability of the seller for competition law breaches by the Amazon affiliate

Is an Amazon Marketplace seller liable for an Amazon affiliate who advertises a product of the seller in breach of competition law? No, the Higher Regional Court of Hamburg (OLG Hamburg) has now decided.

A seller took action against his competitor for a breach of competition law. Both entrepreneurs distributed mattresses, the competitor on his own website as well as on the internet platform Amazon. A third party who participated in the Amazon Affiliates programme advertised the competitor's products in a manner that breached competition law.

Amazon operates a partnership programme which allows third parties ('affiliate partners') to refer to a variety of different products offered on the Amazon platform via affiliate links. When a customer accesses a product offer on Amazon via such an affiliate link and purchases the product, the affiliate partner normally receives a commission from Amazon. The providers of products on the Amazon platform (such as the competitor here) have no possibility of excluding their offers from the partnership programme.

The seller took action against the affected competitor for an injunction due to the breach of competition law committed by the affiliate partner. The Regional Court (LG) Hamburg granted the claim in full. It held the seller's competitor responsible for the breach of competition law committed by the affiliate partner. The competitor disputed this assessment and appealed.

OLG ruling on liability for Amazon affiliate

The Higher Regional Court of Hamburg (OLG Hamburg) (judgment of 20.08.2020 – 15 U 137/19) set aside the decision of the lower court. It was undisputed that the advertising by the Amazon affiliate was unfair. The Regional Court had already correctly established this. However, contrary to the Regional Court's assumption, the competitor was not responsible for the unfair conduct of the affiliate, so the OLG ruled.

The court referred to the principle that a claim for an injunction under competition law can also be brought against the proprietor of an enterprise. This applies if the breach was committed by an employee or agent.

The question in this context was whether an Amazon affiliate constitutes an 'agent' of the Amazon seller whose product is advertised by the affiliate.

Amazon affiliate is not an agent

However, the Amazon affiliate acting unlawfully should not be classified as an 'agent', according to the OLG Hamburg. The decisive factor, according to case law of the Federal Court of Justice (BGH), is that the potential agent is integrated into the business organisation of the entrepreneur in such a way that

• the success of the business operations of the authorised enterprise benefits the operator of the business, and
• the operator of the business has a controlling, enforceable influence over that activity of the authorised enterprise in the sphere in which the disputed conduct occurs.

It could be left open whether the success of the Amazon affiliate's business operations benefits the competitor in this sense. For there is already a lack of controlling and enforceable influence of the competitor on the Amazon affiliate. Furthermore, the Amazon affiliate does not act in the field of business of the competitor, but in its own.

Conclusion

As a rule, marketplace sellers are not liable for competition law breaches by Amazon affiliates.