Why is Amazon supporting a bill that would make it liable for 3rd-party sellers on its platform?Amazon’s marketplace for 3rd-party sellers is huge, accounting for half of its $280B revenue in 2019.
It’s also a bit of a Wild West, with counterfeit and fraudulent products galore.
For years, Amazon avoided legal repercussions by holding itself as a blameless provider of services (inventory, shipping) rather than the “seller of record.”
But the government wants to hold Amazon liable
Two weeks ago, the California courts sided with a customer who sued Amazon after a faulty 3rd-party battery blew up in her face.
A new bill there would make Amazon responsible for its 3rd-party sellers, a much more expensive proposition than… doing nothing.
As with Facebook and Google, regulators are increasingly scrutinizing Amazon for the (physical) content on its platform.
In a 4D chess move, Amazon is backing the bill
In a blog post, the Seattle-based ecommerce giant writes that they share the “California legislature’s goal of keeping consumers safe.”
While the bill would certainly protect end consumers, it could particularly hamper Amazon’s competitors that don’t actually hold inventory.
Namely, Etsy (see blog) and eBay, who both oppose the bill because it “would stretch liability for online sellers beyond the limits faced by brick-and-mortar stores.”
This isn’t Bezos’ first rodeo
As the world’s 3rd (get it?) largest company, Amazon has the tech and legal resources to weather stricter e-commerce regs.
Such rules could block upstarts, hurt existing competitors and, ultimately, reduce consumer choice.
Two previous Amazon moves — supporting an online sales tax and a hike of its minimum wage to $15 — were judged by critics to come from the same playbook.
Amazon could afford it (while its competitors couldn’t). And good PR point ends up being the cherry on top.
