If you held Amazon liable for anything bad a 3rd party merchant ever does, they will react by clamping down on all unverified merchants, and a lot of small/medium businesses will find themselves caught in the crossfire.
Amazon could handle that problem by helping the small merchants more though. Bezos does claim to be "obsessed with the customer" after all, and those businesses are his customers.
Allowing people who buy things on Amazon to get fake products is failing everyone in the whole supply chain apart from the business that supplies the fakes and Amazon itself. If I were Bezos I'd be quite unhappy about that.
If Amazon had direct liability for selling counterfeit products, for example, if the Ove Glove company (first in the original article) could sue Amazon and recover all the revenue that went to the counterfeiters plus a penalty - I believe in this case Amazon would find a solution to ensure supplier verification.
The problem is that currently it's profitable for Amazon to host goods from fraudsters; if (when) any get discovered, they kick them off but keep the proceeds. Society and law should ensure that Amazon loses money when hosting goods from fraudsters, so that the motivation is properly aligned.
With internet companies sometimes being held responsible for illegal content they host (provided by third parties), shouldn't Amazon be liable for facilitating the sale of or directly selling counterfeit goods?... especially when they have been alerted many times that a particular item is counterfeit?
I think the things I raised are problems independent of scale. Amazon deemphasizes the merchant and wants to own the shopper relationship, then turned around and tried to claim that they're not liable for the goods they sell.
This can be solved by requiring higher-risk merchants to put money in escrow for a while (maybe an initial amount plus some fraction of revenue). If they turn out to be selling counterfeits, amazon could use the money to set things right. Otherwise the merchant gets the money.
Prohibit Amazon doing business until they fix the problem.
You can bet the problem will be fixed overnight.
My wider point is this: Bezos knows this is happen, and the only way he gets away with it is because the USA doesn't have enough consumer protection and no desire to.
This has gone beyond fraud, it's abuse of customers.
An important and related fact, addressed in the article, is that Amazon currently escapes consumer product liability laws because they are neither seller nor manufacturer. But they also cannot tell you with any degree of precision who the seller or manufacturer is.
There is a public interest in making /someone/ liable for defective products, as it provides a incentive for sellers to do due diligence on what they sell.
The party most able to root out sellers of defective or counterfeit goods is probably Amazon, but they currently have no incentive to do so as the liability is offloaded to judgement-proof Marketplace sellers.
Amazon's business innovation here is figuring out how to run a multi billion dollar retail business without product liability, and that's negative for society.
It is very hard to eliminate false-positives without introducing a raft of false-negatives as well. If you held Amazon liable for anything bad a 3rd party merchant ever does, they will react by clamping down on all unverified merchants, and a lot of small/medium businesses will find themselves caught in the crossfire. Especially those who don't fall under the umbrella of Amazon's good graces. Is that really what you want?
More generally speaking, do we believe there's any value in having open platforms with platform-owners who aren't trying to police every single actor using the platform? There have certainly been many politicians who wanted to regulate the internet as a whole, similar to how you've asked for Amazon to be regulated. Would society be better off if ISPs were held liable for any fraud/unlawful behavior that happens on their networks, and were expected to police all internet traffic they were routing?
If Amazon chooses to let counterfeiters etc sell on their website, why should they not be held accountable for that? Maybe they will finally show interest in what the heck they are showcasing on their own platform.
The Alternative is going back to eCommerce where individual shops put up their own web site, market their own website and are liable for their own website (and have control over their supply chain)
Today since the build of consumers are on Amazon if you are a retailer you need to be one Amazon, and if you want access to Prime Customer you need to use Fulfillment by amazon, Where now you loose control over your supply chain due to co-mingled inventory
So even if I have a stellar reputation as A+AcmeMerchant, and customers look for my store on amazon they are not guaranteed to get the product that I sent to amazon, no they could get JoeBobScammers Product even though it was sold "by me" and fulfilled by amazon
So I will not go as far as to say amazon should be liable for ALL sales, but I do agree that any Sale that is shipped from an Amazon Warehouse they should be liable for. They choose to comingle all of their inventory they should face the liability
For the products that are actually regulated like the child support seats: hold Amazon liable for selling product that is illegal.
Make it expensive for Amazon to not police the shit that third parties are throwing on the marketplace - and soon you won't see any fakes any more.
You want to know where Bezos got his billions? Partially because Amazon outright shits on all the regulation that traditional brick and mortar places have - like, not selling product that is illegal, counterfeit or offensive.
It is perfectly realistic that that stay out of businesses they can't competently run.
For most of history people selling things had an understanding of what they were selling. If Amazon can't meet that standard for some products, or for third-party sellers as whole, they can just stop.
Alternatively, they could set up a separate site. Something like "Caveat Emptor" or "Bezos's Dubious Flea Market". Something that doesn't trade on the Amazon brand and create confusion between responsible vendors and fly-by-night operations.
That you can't or won't think of a way to do something without harming megacorp short-term profits doesn't make it "unrealistic" to address a recently create problem. I leave it to you to figure out what it does mean.
The retail customers who end up buying the stuff are lavishly treated.
The small businesses which sell their products on Amazon are not really 'customers' and are treated like 5th class citizens.
Proof and burden rests on these suppliers shoulders.
Amazon should be held responsible, and they can recover damages by suing the third party. This protects the buyer in the case that the seller disappears or cannot afford the settlement.
IMO, amazon would be better off moderating their platform.
The solution doesn't have to be ditching 3rd parties as these can create great shopping value. Amazon should create a hurdle that keeps scammers away. While obvioudly there are better solutions than my off the cuff comment you could for example require a significant deposit for new sellers which is lost on sale of fake goods. Or payment terms are 120 days until you reach X reputation (supplier or item) allowing for full refunds to customers and zero payment to suppliers should fakes show up.
Why can't the third party seller be held accountable? Why do we allow unaccountable third party sellers carte blanche access to US consumers?
The way that I see it if someone is harmed then they are due justice. If Amazon lets dodgy international third party sellers run hog wild and harm consumers then Amazon should be at fault here. Otherwise there is no incentive to police these things, there are victims, Amazon makes money, and sellers aren't held to account. It's ridiculous.
I think they should be liable, but I think even just enforcing the existing laws without making them liable would put a stop to it.
Just have the police start tracking down what warehouses counterfeit items came from, and getting search warrants to search them.
Apart from the fact that this would directly reduce the number of counterfeit's... repeatedly shutting down warehouses for searches would kill Amazon's bottom line. Cleaning up after the police would kill Amazon's bottom line. Etc.
It's not exactly justice, but it is damn effective. You can beat the rap but you can't beat the ride and all that.
Then add financial liability IMO. If Amazon charges someone's credit card for a counterfeit motorcycle helmet that turns out to be deadly, they should get hit with a massive fine. Let them go after the upstream and if they don't have a good enough relationship with their business partners to do that, tough luck for them.
Maybe that's the easiest. Make the retailer that charges consumers' credit cards liable and don't let companies hide behind "marketplaces" that are designed to avoid liability.
Amazon could handle that problem by helping the small merchants more though. Bezos does claim to be "obsessed with the customer" after all, and those businesses are his customers.
Allowing people who buy things on Amazon to get fake products is failing everyone in the whole supply chain apart from the business that supplies the fakes and Amazon itself. If I were Bezos I'd be quite unhappy about that.
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