Expanding Online Marketplace Liability Made a Bad Bill Worse

SACRAMENTO, CA (MPG) - August 24 amendments proposed for Assembly Bill 3262 would only exacerbate an already bad idea, the state’s largest and leading small-business association charge.

NFIB testified earlier before the Senate Judiciary Committee on its opposition to AB 3262, stating that the bill increases liability on all online marketplaces, including the small online marketplaces relied upon by many small businesses. NFIB’s concern is that the bill erodes the ability of small- and medium-sized businesses from using their digital platforms.

But subsequent amendments revealed on August 24 make the bill worse by expanding the scope to cover businesses ‘facilitating the placement of products into the stream of commerce.’ 

“Given the vague language in the bill, it is unclear which business owners will be covered under the definition of ‘electronic retail marketplace’ (ERM) and whether their activities constitute ‘facilitating’ the placement of products into the stream of commerce leading to liability,” said John Kabateck, California state director for NFIB.

In an NFIB survey of its members this week, 68% identified ‘increased liability’ as a significant concern for them right now. “This bill will compound their existing fears, frustrations and inability to stay afloat during the COVID crisis,” said Kabateck. “AB 3262 should be rejected. The policy is harmful, the last-minute amendments are flawed, and the timing could not be worse.”

Keep up with the latest on California small-business at www.nfib.com/california 

For more than 77 years, NFIB has been advocating on behalf of America’s small and independent business owners, both in Washington, D.C., and in all 50 state capitals. NFIB is a nonprofit, nonpartisan, and member-driven association. Since its founding in 1943, NFIB has been exclusively dedicated to small and independent businesses and remains so today. For more information, please visit nfib.com.