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CA Product Liability bill creates an unlevel playing field for small businesses

August 27, 2020

A harmful bill - AB 3262 - continues to advance in California, which would hold marketplaces like eBay and others liable for defective products sold on the platform. This bill comes at a time when small businesses, amid COVID-19, are already struggling and have come to rely on ecommerce more than ever. The bill would cripple small businesses, jeopardizing how they sell products and reach consumers online. As a peer-to-peer marketplace, eBay provides a platform for buyers and sellers to connect, and enables thousands of California small businesses to reach customers on a global scale. Extending product liability to eBay would harm both sellers and buyers in a number of ways:

  • It could severely limit selling opportunities for small businesses at a time when many small businesses need every possible selling opportunity to stay afloat due to COVID-19. 

  • As mass closures of brick and mortar stores in California continue, this bill could significantly increase costs and limit access for certain products.

eBay’s commitment to consumer safety is long-standing and a central value of our company. While AB 3262 has the well-intended goal of protecting consumers from defective products, the bill would do little to achieve that goal. AB 3262 would instead raise costs and limit choices for California consumers and small businesses that use third-party marketplaces to reach millions of buyers around the world. The bill would also have the seemingly unintended consequence of further cementing dominant ecommerce retailers who can absorb these costs. 

AB 3262 would create an unlevel playing field for small businesses by making peer-to-peer marketplaces strictly liable for products sold on the marketplace – a standard even higher than that of brick and mortar establishments. 

While a California court recently found that Amazon could be held liable for sales of products on its marketplace, AB 3262 goes far beyond the court’s decision and applies the same standard to dozens of pure third-party marketplaces that simply enable small businesses to reach customers. This is a one-size-fits-all solution that, during a critical time, would only disadvantage California small and micro businesses who depend on ecommerce to thrive.

The California Legislature has until Monday, August 31 to pass the bill. We will continue to keep Main Street Members updated.