Comment by endisneigh
5 years ago
Three outcomes I see from this:
1. eBay and Amazon basically drop all small sellers.
2. eBay and Amazon require third party sellers to hold insurance protecting themselves if anything happens.
3. eBay and Amazon aggregate data and drop selling of broad categories of products that statistically lead to lawsuits.
I do not see how these three things are not implemented in the next 12 months.
Some important points of the decision seem to be:
Amazon:
A) takes the payment (and later disburses it net30/60/90 whatever) instead routing of it (possibly less a fee) directly to the seller
B) Doesn't allow communication directly between the seller and buyer
C) Requires already fairly significant restrictions on the seller
I don't think eBay does any of those things or at least not to nearly the same degree.
Also, Amazon purposely mixes catalogues and advertises their own stock together with third party goods, and there's no clear wall on the site between them. If you look hard enough, you can see which ones are third party, but for a casual buyer it's all the same space. It's like if I came to Walmart and random goods on the shelves were "third party" and Walmart tried to claim they have nothing to do with it, just renting out the shelf space. Probably wouldn't fly very well in court.
I don't know if they still do it, but for the same SKUs, there were stories on HN about how they mingled the stock.
So you might get blamed for counterfeit goods sold by someone else if Amazon fulfilled an order with the 'same' goods provided by another seller instead of those actually provided by you.
I haven't heard that leading to any lawsuits like this, but it easily could be an issue in the future.
#2 should have been a requirement. I used to sell a product through Hot Topic, its no Walmart or Amazon in terms of scale, but a Fortune 500 retailer with around 800 stores when we were a vendor and insurance was required.
I mean not requiring sellers to be insured - and yes every product is different, has different risks, but that is reflected in the insurance premium - basically is Amazon saying they don't give a shit about the quality of the products they market on their marketplace nor the safety of their marketplace customers. Its scandalous and if people only knew how much power they actually had they would crush Amazon into the dirt over night just by collectively organizing a mass cancellation of Prime, 1 week boycott of purchases and visitation...it would bring Amazon to its knees.
I’m baffled by the idea that anyone would sell anything without product liability insurance. Even at a shitty hardware startup sending out our first dev kits we made sure to have that. Maybe it’s different if you’re a fly by night drop shipped but still insane to me.
From some googling, it seems Amazon does require this of all sellers but didn’t require proof. I imagine we’ll see increased enforcement now.
Just for some insight my product was a consumable product (considered candy/confectionary) and packaged in glass. I think the insurance premium came out to $700/year (I forget the exact coverage but I'm sure it was a $1M to $2M policy).
> I do not see how these three things are not implemented in the next 12 months.
4. Supreme Court throws consumer protection under the bus and finds in Amazon's favor
I believe this case is state law. The supreme court wouldn't have jurisdiction generally speaking.
In that case, wouldn't it just go to the California Supreme Court instead of SCOTUS?
But yeah, unqualified usage of 'supreme court' makes things confusing because that normally resolves to SCOTUS.
This sounds like a case that could easily be construed to constitute interstate commerce.
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Alternatively, the Supreme Court could flex its muscles and show those naughty big tech firms who's boss. I'm sure plenty of conservatives would love that.
That impulse would be balanced by the "pro-business" (usually anti-consumer) attitude many conservatives have, so it could go either way.
I am not that familiar with US politics, but "pro-business" does not mean "anti-consumer". In my country pro-business measures would be to make it simpler to open a new company (it used to take several months) and there is nothing "anti-consumer" in it.