August 5, 2020

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Back from the dead: Amazon product liability bill

By
Katy Murphy
Politico Pro

A hotly contested California proposal to make Amazon and other virtual marketplaces liable for defective products that cause injury is back in play.

What happened: The Senate Judiciary Committee scheduled a third hearing, on Aug. 18 — after earlier planning to have just two because of the pandemic-shortened session — and put CA AB3262 (19R) on the agenda.

The surprise change came after Committee Chair Hannah-Beth Jackson (D-Santa Barbara) explained that time constraints forced her to cull bills that were "extremely complicated and contentious," like AB 3262. She called such choices "difficult and frustrating."

Impact: The closely watched bill would make California one of the first states in the nation to hold Amazon, eBay and Etsy to the same standard as other online retailers for mass-produced products sold on their platforms. (It includes an exemption for products sold by auction and used goods as well as the handmade products for which Etsy is perhaps best known.) Amazon has largely avoided liability for defective products with the argument that it is not the seller of such goods.

The politics: The tech industry is fighting AB 3262, with the trade group TechNet saying in a statement that it "will stifle online commerce at exactly the wrong time" and "creates bad precedents in our legal system and our economy." But the bill won support from a handful of Republicans on the Assembly floor in June. Assemblymember Jordan Cunningham (R-Templeton) framed it as a free-market and fair competition issue.

What's next: The bill is set for a hearing on Aug. 18.

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