New Amazon Policy Could Impact Dietary Supplement Sales

Amazon published a new Dietary Supplements Policy that could have a major impact on supplement sales on the platform. The new policy requires sellers to provide Certificates of Analysis (“COAs”) for the products they sell, additional information about the supplements, and a letter of guarantee from the brand owner that the supplements comply with various regulations. For those with Seller Central accounts, the new policy is available here:

https://sellercentral.amazon.com/gp/help/G55N3JF2WQS7RVNE

Amazon notified supplement sellers that the policy will go into effect in May. In the notice, Amazon states that if a seller does not comply with the new requirements by May 31, 2021, Amazon may remove the sellers’ listings.

While we are not aware of any public statements by Amazon of the reasons for the policy change, it may have to do with some recent court decisions that have allowed products liability lawsuits to proceed against Amazon. See, e.g., State Farm Fire and Casualty Co, et al. v. Amazon.com Inc., Case No. 008550/2019 (N.Y. Sup. Ct. Dec. 8, 2020). Consumers have tried for quite some time to hold Amazon responsible for injuries related to products sold by third party merchants on the platform. For the most part, Amazon has been successful in avoiding liability by arguing that it is not a “seller” under state products liability laws. But some courts have found that Amazon does qualify as a seller in certain circumstances and may be held responsible for injuries arising from products sold by third party sellers on its platform.

Also, the FDA has reported issues with some supplements products on Amazon, including some that contain potentially dangerous drugs. See, e.g., https://www.consumerreports.org/dietary-supplements/fda-finds-hidden-drugs-in-weight-loss-sexual-enhancement-dietary-supplements-sold-on-amazon-ebay/. These reports may have contributed to Amazon’s decision to adopt this policy.

Turning to the substance of the policy, there are three main components that sellers must provide: 1) Certificates of Analysis, 2) Product images (showing all sides of the label, supplement facts panel and ingredients list, contact information about the brand owner, and the product name), and 3) a letter of guarantee from the brand owner. The first and third components merit further discussion.

Amazon has certain requirements for the COAs. Among other requirements, the COA must be from an ISO/IEC 17025 accredited laboratory and a COA must be provided for each product that the seller offers. The COA must also have been issued within the last 9 months.

This policy raises several issues. For example, the ISO/IEC 17025 is simply one way to establish reliability of a lab, but it is not the only way. And it may not be part of the brand’s current procedure. Some labs that provide COAs for supplement providers may not be accredited in this manner. Brands are left with testing at a new lab or having their current lab accredited. With the narrow window before implementation, brands may not have a COA for every product issued within the last 9 months. Typically, not every batch is tested, and depending on the size of the batch and shelf life of the product, it could be a long time before a fresh COA is prepared in the ordinary course of business. Further, COAs are often viewed as confidential by both the brands and labs, and they may not want to disclose these to Amazon or the resellers that may request them.

The Letter of Guarantee has several requirements as well, including that it must come from the “brand owner” as opposed to the third party seller. Consistent with this, the Letter of Guarantee must be on the brand owner’s letterhead and it must include assurance that (1) the product is manufactured consistent with the Good Manufacturing Practices in 21 CFR 111, (2) “only lawful and safe” ingredients are used, as defined by 402(f) of the FD&C Act, and (3) concentrations of active ingredient as set forth on the labels are safe for consumption.

It is possible that this policy is aimed mostly at the numerous private labels brands on Amazon. These brands are often Amazon-only brands that are not otherwise known to consumers. While the owner of a private label brand can put together a Letter of Guarantee consistent with Amazon’s requirements, a typical (or, especially, an unauthorized) third party seller may not be able to get the brand owner to provide a letter of guarantee.

Of course, a policy is only as strong as its enforcement. It remains an open question how vigorously Amazon will enforce this policy and whether Amazon will invest the necessary resources into verifying the authenticity of submitted documents. But if Amazon applies it consistently to all brands and all sellers, it could have a major impact on which supplements are sold on the platform and who sells them.

Whether you’re a supplements brand that sells directly on Amazon, through a third party seller, or a brand that does not want its product sold on Amazon, this new policy could have a significant impact on how your products are sold on Amazon. For additional information on what this new policy may mean for your brands, please contact Adam Sherman at acsherman@vorys.com.