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Last Tuesday, Etsy CEO Josh Silverman contested that Amazon is “taking bold steps to wipe out its competitors” by backing a new California consumer protection bill.
On Friday, Amazon left its peers when it voiced conditional support for the bill, AB 3262, that aims to hold “electronic retail marketplaces” to the same liability standards applied to brick-and-mortar retailers. Etsy, EBay’s policy arm, and other industry groups oppose the bill mentioning that existing law already protects consumers and that it will stifle small businesses that utilize online selling. Silverman says that Amazon’s support of the bill is not in good faith, quoting it as an “abuse of power market play.”
“Amazon is taking bold steps to wipe out its competitors by promoting complex, hard-to-comply-with legislation that only they can afford to absorb… Amazon’s goal is to be the only place to buy stuff online, hobbling mom-and-pops that sell unique items in their shops, or more frequently since COVID, through marketplaces like Etsy. Small businesses, struggling now more than ever, will ultimately bear the brunt of the overbearing burdens of AB 3262.”Etsy CEO Josh Silverman
One Amazon spokesperson pointed CNBC to the Friday blog post written by its public policy chief Brian Huseman. According to Huseman, the company would support AB 3262 if it includes “all online marketplaces regardless of their business models.”
“Injured consumers should be able to seek compensation regardless of how a particular online marketplace makes money,” Huseman pointed, noting how online marketplaces profit by charging sellers to list a product, by taking a cut of sales or via advertising on the market.
Last Monday, lawmakers amended the bill to include online marketplaces that profit from merchants’ advertising fees in response to Amazon’s blog post.
If it passes, AB 3262 would be the first law of the United States to hold online retailers like Amazon liable for damaged goods sold on their website.
This August, Amazon struggled as it was held liable for damages caused by a defective replacement laptop battery that caught fire and caused a woman third-degree burns. The victim, Angela Bolger, alleges she bought the laptop battery from a third-party seller, Lenoge Technology HK Ltd., on Amazon’s marketplace. Amazon won against the lawsuits that put the liability on them.
It is merely a conduit between buyers and third-party sellers. Still, the recent California ruling and the proposed liability bill may weaken that stand. Amazon supervises a marketplace hosting millions of third-party sellers and now accounts for the estimated 60% of its e-commerce sales.
Amazon hosted some damaged, counterfeit, and dangerous products. With these adversities, the company faces more pressure from regulators examining their efforts to police the marketplace. There was a hearing last July in front of the House Judiciary’s antitrust subcommittee to question CEO Jeff Bezos on the sale of counterfeits on the market on a hearing last July in front of the House Judiciary’s antitrust subcommittee. Bezos mentioned that Amazon thoroughly vetted sellers on its marketplace and called for Congress to pass more stringent laws targeting counterfeiters.