Etsy CEO Josh Silverman has accused Amazon of abusing its market power by supporting a California consumer protection bill. Last week, Amazon said it would support the bill as long as it holds all online marketplaces – not just Amazon – liable for damages caused by faulty products sold by third parties. Silverman argues that Amazon is trying to stifle competition and wipe out competitors by supporting legislation that only Amazon "can afford to absorb."
- The bill in the California legislature, AB 3262, would require all electronic retail marketplaces to be held strictly liable for damages caused by defective products, similar to most brick-and-mortar retailers now. If someone was injured by a broken toaster oven, for example, Amazon would have to pay medical and other costs associated with that, even if it was sold by a third party.
- Last Friday, Amazon policy guru Brian Huseman said the company supports the bill if it ensures that "all stores, including online marketplaces, are held to the same standards." Lawmakers have amended the bill to support this idea.
- But Silverman and others argue that small businesses would face escalating legal costs if such a bill was passed. He accused Amazon of "working back channels to redirect this legislation to their advantage" through lobbying.
- California lawmakers are expected to vote on AB 3262 this week. If passed and signed by the governor, it would be the first law of its kind in the U.S.
- Earlier this month, an appeals court ruled that Amazon should be held liable for products sold on its website that turn out to be defective. Amazon has vowed to appeal the ruling, which determined that it's liable after a defective laptop battery sold on its marketplace severely injured a San Diego resident.