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Anyone have any guess why Amazon pulled the plug? There must be a reason beyond "Amazon has decided against “boarding fresh crowdfunding accounts at this time”

by Irfaan 14y ago

Anyone have any guess why Amazon pulled the plug? There must be a reason beyond "Amazon has decided against “boarding fresh crowdfunding accounts at this time”" - just pulling the plug on an entire category of products willy-nilly is a terrible image for a cloud service provider to project.

ahi 14y ago
Likely fraud related. Not that unglue.it is running a scam, but Amazon probably can't be bothered to separate the money laundering operations from the legit crowdfunding operations.
gluejar 14y ago
I was told that crowdfunding presents regulatory and contractual challenges that Amazon Payments is trying to deal with. They don't want new crowdfunding clients at this time.
- pja 14y ago
  Something to do with the regulations for credit card payments? IIRC you can't 'pre-pay' for goods on a credit card: the merchant agreement says that you can only be charged when you actually ship the goods. This makes crowdfunding projects like this a little tricky, since they doesn't map well to the legal agreements that make up the existing payment systems.
  - TylerE 14y ago
    Much more likely SEC/investment regulations.
    - ScottBurson 14y ago
      No. You're thinking of equity crowdfunding. No equity is changing hands here.
      - olefoo 14y ago
        The purchase of publication rights is an equity transaction, in that a valuable piece of (intellectual) property is changing hands. And the law as written is murky enough that it's not simple to say that crowdfunding of public benefits wouldn't be covered. Not to say that Amazon couldn't be a bit more transparent about what their concerns are. By running a crowdfunding site under the new rules; is Amazon taking on unacceptable liabilities? Could Amazon be held liable by funders if unglue.it failed to secure rights to a book they had nominated to publish? Those are serious questions that only a lawyer can answer.
        ScottBurson 14y ago
        The purchase of publication rights is an equity transaction, in that a valuable piece of (intellectual) property is changing hands. Uh, no. By that definition, every transaction would be an equity transaction. Equity specifically refers to an ownership interest in a business.
  - gav 14y ago
    You can charge the customer as long as you give them the ability to cancel for a full refund if you can't ship within the promised timeframe. The FTC enforces this rule, see "Mail or Telephone Order Merchandise Rule"[1]. I think the legal gray area comes from customers believing that they are buying a product from the crowdfunders. This is covered by an advisory by the FTC; to be covered by dry-testing exception, the following conditions need to be met: * In promoting the merchandise, the merchant can make no suggestion that the merchandise will be shipped or that customers expressing an interest in it will receive it. * In all promotional materials, the merchant must disclose all material aspects of the promotion, including the fact that the merchandise is only planned and may not be shipped. * If any part of the promotion is later dropped, the merchant must notify subscribers of the fact within a reasonable time after soliciting their subscriptions. * If, within a reasonable time after soliciting their subscriptions, the merchant has made no decision to ship the merchandise, it must notify subscribers of this fact and give them the opportunity to cancel and, where payment has been made, make a prompt refund. * The merchant can make no substitutions of any merchandise for that ordered. It seems obvious that crowdfunding efforts don't meet these criteria. [1] http://business.ftc.gov/documents/bus02-business-guide-mail-and-telephone-order-merchandise-rule http://business.ftc.gov/documents/bus02-business-guide-mail-...

by Irfaan 14y ago

ahi 14y ago

Likely fraud related. Not that unglue.it is running a scam, but Amazon probably can't be bothered to separate the money laundering operations from the legit crowdfunding operations.

gluejar 14y ago

I was told that crowdfunding presents regulatory and contractual challenges that Amazon Payments is trying to deal with. They don't want new crowdfunding clients at this time.

pja 14y ago
Something to do with the regulations for credit card payments? IIRC you can't 'pre-pay' for goods on a credit card: the merchant agreement says that you can only be charged when you actually ship the goods. This makes crowdfunding projects like this a little tricky, since they doesn't map well to the legal agreements that make up the existing payment systems.
- TylerE 14y ago
  Much more likely SEC/investment regulations.
  - ScottBurson 14y ago
    No. You're thinking of equity crowdfunding. No equity is changing hands here.
    - olefoo 14y ago
      The purchase of publication rights is an equity transaction, in that a valuable piece of (intellectual) property is changing hands. And the law as written is murky enough that it's not simple to say that crowdfunding of public benefits wouldn't be covered. Not to say that Amazon couldn't be a bit more transparent about what their concerns are. By running a crowdfunding site under the new rules; is Amazon taking on unacceptable liabilities? Could Amazon be held liable by funders if unglue.it failed to secure rights to a book they had nominated to publish? Those are serious questions that only a lawyer can answer.
      - ScottBurson 14y ago
        The purchase of publication rights is an equity transaction, in that a valuable piece of (intellectual) property is changing hands. Uh, no. By that definition, every transaction would be an equity transaction. Equity specifically refers to an ownership interest in a business.
- gav 14y ago
  You can charge the customer as long as you give them the ability to cancel for a full refund if you can't ship within the promised timeframe. The FTC enforces this rule, see "Mail or Telephone Order Merchandise Rule"[1]. I think the legal gray area comes from customers believing that they are buying a product from the crowdfunders. This is covered by an advisory by the FTC; to be covered by dry-testing exception, the following conditions need to be met: * In promoting the merchandise, the merchant can make no suggestion that the merchandise will be shipped or that customers expressing an interest in it will receive it. * In all promotional materials, the merchant must disclose all material aspects of the promotion, including the fact that the merchandise is only planned and may not be shipped. * If any part of the promotion is later dropped, the merchant must notify subscribers of the fact within a reasonable time after soliciting their subscriptions. * If, within a reasonable time after soliciting their subscriptions, the merchant has made no decision to ship the merchandise, it must notify subscribers of this fact and give them the opportunity to cancel and, where payment has been made, make a prompt refund. * The merchant can make no substitutions of any merchandise for that ordered. It seems obvious that crowdfunding efforts don't meet these criteria. [1] http://business.ftc.gov/documents/bus02-business-guide-mail-and-telephone-order-merchandise-rule http://business.ftc.gov/documents/bus02-business-guide-mail-...