Amazon’s Patent On “1-Click” Ordering Expires Soon

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January 3, 2017 7:52am NASDAQ:AMZN

NASDAQ:AMZN | News, Ratings, and Charts

From Retail superpower, Inc. (NASDAQ:AMZN) will face a bit stiffer competition from its e-commerce rivals later this year when an important patent it owns expires.

The patent in question deals with the company’s “1-Click” ordering system, which allows logged-in users to immediately buy an item with a single click or tap. This removes any barriers to sale conversion whatsoever, and has no doubt allowed Amazon to boost revenue significantly over the years. From Forbes:

Amazon first applied for a patent on 1-Click in 1997, and it was granted in 1999. The core of the proposition is that by storing your payment and address details you only need to click a single button to order something. This means that there are fewer steps to ordering, which is less time-consuming and what is termed “frictionless”.

The only other retailer currently allowed to use the 1-Click system is Apple Inc. (NASDAQ:AAPL), which paid Amazon an undisclosed sum to license the “frictionless” checkout system on its App Store.

Amazon’s patent currently only applies in the U.S. and Canada, as the EU has long rejected the legal status of it as too simple and reliant on prior mechanisms. In other words, the EU feels that Amazon is simply setting cookies to let users skip the shopping cart/checkout process.

How much will the change affect Amazon’s business? Probably not that much, but it could open the door for other retailers to install similar systems. And competition is almost always a healthy thing., Inc. shares rose $10.13 (+1.35%) in premarket trading Tuesday. In 2016, AMZN gained 10.95%, versus a 12.00% rise in the benchmark S&P 500 index during the same period.

AMZN currently has an POWR Rating of B (Buy), and is ranked #11 of 44 stocks in the Internet category.

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