Amazon.com Inc. is facing mounting criticism over its support for a consumer protection measure in California that would hold online marketplaces liable for damages caused by defective products.
“Amazon’s goal is to be the only place to buy stuff online,” Josh Silverman, Etsy’s CEO, wrote on Etsy’s website. “Why would Amazon sign up to support a bill that is supposedly anti-Amazon? It’s simple. With Amazon’s lobbying, AB 3262 [Consumer Protection Bill] has become an increasingly complicated piece of legislation that is going to be expensive for any small or mid-sized business to try to comply with. Amazon is betting on that.”
Today, if a customer is injured by a defective product, they can seek damages from the retailer and the manufacturer. If the measure is enacted, it would extend liability protection to digital marketplaces. The bill exempts handmade and auctioned products and websites that connect buyers with third-party sellers directly, such as eBay, Craigslist and Etsy.
Brian Huseman, Amazon’s vice president of public policy, wrote on the company’s blog that the eCommerce company supports the legislation. If it is enacted, companies (including Amazon) could be held liable for damages or injuries caused by items sold by third-party sellers, he wrote.
“We share the California legislature’s goal of keeping consumers safe,” Huseman wrote. “To further that goal, this legislation aimed at protecting consumers should apply equally to all stores, including all online marketplaces.”
But Harley Finkelstein, the chief operating officer at Shopify Co., the Ontario-based eCommerce company, told CNBC that the bill would stifle small online businesses.
“We unequivocally believe that for the future of commerce to survive and thrive, it has to be in the hands of the many, not the few,” he said. “Consumer protection is very important, but it cannot come at the expense of independent businesses who are, frankly, the backbone of our economy.”
The controversial bill was authored by California Assemblyman Mark Stone (D-Santa Cruz). It is co-sponsored by the Teamsters, the United Food and Commercial Workers International Union and the Consumer Attorneys of California. In addition, the Consumer Federation of California, Consumer Reports and the California Labor Federation have voiced their support.
A similarly long list of opponents includes the Internet Association, the California Grocery Association, Net Choice and the California Chamber of Commerce.
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