The National Federation of Independent Business helped convince a state legislator to hold a bill making online sellers liable for faulty or defective products.
The legislation would have led to a flood of lawsuits against small online sellers, John Kabateck, California State Director of NFIB, told the Northern California Record.
“If a manufacturer is knowingly placing a defective or faulty product into the marketplace that could do harm to others, they should be held to the fullest account,” Kabateck said. “But it’s ridiculous for policy makers to extend that to any marketplace, online or otherwise, for merely serving as the go-between the manufacturer and the consumer."
An exception would be if the online sellers knew the product was faulty and continued to sell it, Kabetek said.
“But it’s ridiculous to expect any online seller or broker to know about that product without having to open it up and inspect it themselves or have some deep knowledge of the product to be held accountable,” Kabateck said.
The proposed legislation, Assembly Bill 3262, also would have extended liability to any firm advertising the product, Kabateck said.
Assemblyman Mark Stone, (D-Scotts Valley) sponsor of the bill, realized it would “cast a net over a lot of struggling small business owners” and decided to hold the bill, said Kabateck.
“We are pleased and grateful that he made the wise choice to hold this bill from moving forward,” the NFIB director said. “We hope that we won’t have to see this again.”
However, with the powerful lobbying of plaintiff’s lawyers, he said the NFIB would not be surprised if the legislation returns next year in some form.
“They’re hell bent on suing anybody and everybody they can get their hands on in the business community without realizing the fallout,” Kabateck said.
Online selling has been crucial to small businesses during the COVID-19 pandemic, Kabateck added.
“More and more small businesses have relied almost fully on the Internet and social media to market their wares,” he said. “Their only means of survival has been on social media and through their websites. To create a new barrier of entry for already fragile if not decimated small businesses is an insult.”