Amazon's Dash button service breaches consumer protection and e-commerce regulations in Germany, a court in the country has ruled.
News of the judgment, which has not yet been published, was detailed by a consumer watchdog which has been embroiled in a legal battle with the online retail giant over the Dash button service. Amazon has said it will appeal the ruling.
Amazon Dash is a Wi-Fi connected button that consumers can press to place a new order for the particular branded goods. Orders are managed through Amazon's mobile app where consumers can also select to be notified when they place an order. The Dash button only displays the brand of the product. It does not give any further details about the product's characteristics, its price, or how and when it will be delivered.
According to the consumer advice centre of North Rhine-Westphalia, the Higher Regional Court in Munich held that Amazon's Dash button service was in breach of German law because the company failed to provide consumers with all the information they are entitled to prior to completing a purchase. It also took issue with the flexibility the company has outlined in its consumer contracts.
"After installation and its connection … the order of the product is triggered immediately by pressing the Dash button," said the consumer advice centre. "If you do not have the app at hand, you will not learn the conditions under which the order is placed, even if you have a good memory. Because Amazon reserves the terms and conditions to ask for a different price or even to deliver a different product than originally selected by the user."
"However, the price and the specific product are important – also legally required – information that everyone has to know before pressing the Dash button… The Dash button itself must make clear by clear labelling that a paid order is triggered," it said.
"The judges made it clear that Amazon must inform the customer immediately before sending the order about the price and the actually ordered goods. So far, this information is sent after pressing the button to the app, so after ordering. The 'Amazon Dash Replenishment Terms of Use' clause, which reserves Amazon's right to change the terms of the contract, was also considered inadmissible by the Higher Regional Court. In addition, missing on the button, the note that a payment obligation is triggered. However, this notice is mandatory for electronic commerce contracts," the watchdog said.
Munich-based technology law expert Daniel Widmann of Pinsent Masons, the law firm behind Out-Law.com, said the finding of the court was not unexpected – Widmann predicted potential issues for Amazon when it launched the Dash button service in Europe in 2016.
"Germany applies a strict consumer protection law regime, but the rules, including those specific to e-commerce, are primarily based on EU directives," Widmann said. "There is therefore a reasonable risk to Amazon that other consumer rights bodies in other EU jurisdictions will challenge the way the Dash button service operates."
Amazon previously refuted claims that its Dash Button service breached Germany's consumer protection laws. In a statement issued in reaction to the latest ruling, the company stood by that position: "The decision is not only against innovation, it also prevents customers from making an informed choice for themselves about whether a service like Dash button is a convenient way for them to shop. We are convinced the Dash button and the corresponding app are in line with German legislation. Therefore, we're going to appeal."
Chief of the consumer advice centre of North Rhine-Westphalia, Wolfgang Schuldzinski, said: "We are always open to innovation. But if innovation is to put consumers at a disadvantage and to make price comparisons more difficult, then we use all means against them, as in this case."
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