Ina Steiner EcommerceBytes Blog
News and insight focusing on ecommerce.
by Ina Steiner, Editor of EcommerceBytes.com
Thu July 11 2019 21:30:44

Law Would Give Amazon and eBay Sellers New Rights

By: Ina Steiner

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California lawmakers are considering legislation that would impose requirements on marketplaces in their dealings with sellers. The bill AB-1790 was introduced in February, has been amended several times, and appears to have passed the Senate committee on Tuesday.

The Fox and Hounds Daily, a publication that combines the news of business and politics in California, summarized the assembly bill in June as follows: "This bill would require a marketplace to ensure that their terms and conditions regarding commercial relationships with marketplace sellers meet specified requirements, including that the terms and conditions are drafted in plain and intelligible language."

Ed Rosenberg of the ASGTG Amazon Sellers Group called out several highlights of the bill today (notice that he mentions Amazon, but the bill would apply to all marketplaces):

- Amazon will need to explain with more details why a seller is suspended.
- Liability insurance would be required by the 3P seller (enforced by Amazon).
- Clearer guidelines for when Amazon can withhold funds from sellers. 
- TOS needs to be drafted in plain and intelligible language.

We would add to that list of highlights the provision that would require greater transparency in search rankings - many a seller would love to know why their listings may appear further down in search than other listings.

As Rosenberg mentioned, the assembly bill requires marketplace sellers to have liability insurance, which many business sellers have. However, consumer sellers do not, such as the person selling a used handbag on Poshmark, a comic book on eBay, or a handmade or vintage item on Etsy.

In perusing the bill and its various drafts, it appears the current version would apply to marketplaces (and apps) whether or not they are located in California, but with regard to the requirement that sellers obtain liability insurance, it appears that would apply to sellers located in California.

When introduced in February, AB-1790 called out Amazon by name, and drafts also contained language about marketplaces having to pay interest related to holding sellers funds for over 90 days should the seller prevail in an action regarding the withheld funds, but the current bill is more streamlined than previous drafts.

You can dig into AB-1790 yourself on this page on Legislature.ca.gov - it would be a significant development in ecommerce if passed. Let us know what you like and don't like about the proposed legislation.



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This user has validated their user name. by: The End

Fri Jul 12 03:00:27 2019

Having just now researched the price of General Liability insurance,
It will effectively remove about $1,000 a year from me.

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by: pace306 This user has validated their user name.

Fri Jul 12 08:01:28 2019

ANY new positive tools given to sellers is a good thing.

The vicious marketplaces, staffed by 2 bit shyster lawyers who steal sellers money like a cheap carnival operator have to be dealt with.

Even though Im a registered LLC - I dont have that kind of insurance - but Ill worry about that down the road apiece - maybe a bunch of sellers can get together and get some kind of large umbrella policy ... ?

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by: sasikat9 This user has validated their user name.

Fri Jul 12 08:40:46 2019

Maybe Amazon and or Fleecebay will offer their version of insurance. HA HA HAHA

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by: ignatz This user has validated their user name.

Fri Jul 12 09:21:45 2019

"Liability insurance would be required by the 3P seller (enforced by Amazon)."

A wolf in sheep's clothing.  Under the guise of helping 3P sellers, the beneficent government of the State of California wants to impose a requirement for liability insurance on 3P sellers.

That necessarily means that the beneficent government of the State of California believes that 3P sellers **have** liability, even though through most of American legal history sellers have not been considered liable for problems & defects in the products they sell.  It has been the **manufacturers** who have been considered liable for those problems & defects.

If the recent court case finding Amazon liable holds, and if California gets its way, then the small 3P seller - on Amazon, eBay, Etsy, Bonanza, etc. etc. - will become a thing of the past.

The only way to sell used items will be via Craigslist for cash, or index cards on your local supermarket's bulletin board - all the while taking great pains to retain complete anonymity.

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by: purpleiris This user has validated their user name.
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Fri Jul 12 09:56:11 2019

It's a start. They need to address how marketplaces treat their customers' businesses -- as if they own them. Marketplaces need to stay out of the day-to-day operations of a business instead of imposing uneducated and unfounded ideas on them (ie, forcing them to offer free shipping if they want to be seen in search, which is extortion).

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This user has validated their user name. by: toolguy

Fri Jul 12 10:09:56 2019

I used to carry liability insurance, Boeing required it to get access on their property to remove surplus items.

I had a $1 million policy and it was costing us $600 a year thru Allstate.

I dropped it a few years back since we haven't bought any new merchandise in over 3 years. . . .

I'm not about to sign up for it again!

Moving to Arizona sometime in 2020

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This user has validated their user name. by: iheartjacksparrow

Fri Jul 12 10:50:45 2019

If I sell a comic book on eBay, and the buyer gets a paper cut, I'd be liable for the buyer's medical bills? At what point are the snowflake buyers going to take some responsibility for the use, or misuse, of the items they purchase? Humanity seems to have evolved into thinking that for anything bad that happens, it's never their fault.

I'm okay with the liability insurance is that's required on eCrater as I can deduct it as a busines expense.

And if eBay is required to write everything in "intelligible language," that's going to put the people who compose everything as a word salad out of work.

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This user has validated their user name. by: NoMoreEbay

Fri Jul 12 11:00:42 2019

''If a marketplace decides to suspend or terminate a marketplace seller, the bill would require the marketplace to provide the marketplace seller with a written statement of reasons for that decision, as specified.''

The reasons are already in place. A simple email from ebay would satisfy this bill.

''The bill would prohibit a marketplace from destroying products in its possession that are the property of a marketplace seller without offering the marketplace seller a reasonable opportunity to retrieve the marketplace seller’s property.

If for some reason (I have no idea what that is) ebay is in the possession of a seller's item and wants to destroy it. They first have to give the seller the option on his dime to collect his property. So?

''The bill would also require marketplaces to require marketplace sellers to purchase and maintain liability insurance, as provided.''

And just how do you suppose the 'marketplaces' are going to enforce that. As it is, all you need to sell on ebay is a pulse and an Internet connection. Are they going to require 10 million USA sellers to submit proof of insurance. Heck, the Philippines can't even remember which cube to sit in much less handle customer documents. Not only that, the casual, small seller will virtually be eliminated from the 'marketplaces.'

''Set out the grounds for decisions to retain, or refuse to disburse, funds in its possession belonging to a marketplace seller pending investigation or resolution of a dispute between the marketplace and the marketplace seller. seller and the objective grounds for suspending or terminating a marketplace seller from participating in the marketplace.''

ebay's shyster lawyers could draft the verbiage for this in less than a day. It changes nothing.

''If the marketplace permits the possibility to influence ranking or preferential placement within the marketplace of tangible personal property or services sold by marketplace sellers through the marketplace, the terms and conditions shall include a description of those possibilities and of the effects of the ranking or preferential placement, whether ranking or preferential placement may be purchased, and the price of that ranking or preferential placement.''

This will give ebay carte blanche to create a pay-to-play system. A tier system if you will. $500 a month you get top search ranking, 50 FB removals for every 200 (unless you're Reebok.) For $300 a month you get top to middle search ranking and so on. This would do nothing but benefit ebay and line their pockets with even more money.

When I first read Ina's title, I admit I got excited. I thought 'finally, something is being done about the decade of abuses towards sellers.' How disappointed I was after actually reading the bil. This entire thing is nothing more than a bunch of laughable Kangaroo bills that do absolutely nothing for the online seller. In fact, it will actually help ebay. Cali knows who butters their bread and it aint us.

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This user has validated their user name. by: NoMoreEbay

Fri Jul 12 11:11:01 2019

Speaking of Reebok. Their neg FB is now back down to a paltry 792. Down from over 10,000. Looks like ebay doubled down last night and just got er done!

And where is this double standard about 'Treatment' in Cali's bill? N..O..W..H..E..R..E..

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by: thievesBay This user has validated their user name.

Fri Jul 12 12:53:28 2019

@NoMoreEbay The previous Reebok feedback numbers we were all talking about were only for the past 1 month. That is down to 37 at the moment! This was over 10,000, under 3,000, then up again over 7,000, now it's all gone. eBay has essentially removed EVERY negative. eBay are such frauds. What would happen if people could leave feedback for eBay? What kind of horrendous rating would that be? But surely they'd scrub the negatives from their own feedback as well. Crooks...

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by: pace306 This user has validated their user name.

Fri Jul 12 13:08:05 2019

thieves - they do that when they remove negative comments/questions left by sellers on Facebook.

eBay has ALWAYS been a criminal organization - cheating/lieing/stealing/defrauding - all in the name of "Supposed ecommerce".

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by: TomH This user has validated their user name.

Fri Jul 12 15:34:40 2019

And, typical of them, California once again trying to legislate to the entire country.  

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by: Grady This user has validated their user name.

Sat Jul 13 11:40:35 2019

California is good at choking everyone with new legislation. Not much else.

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by: SANT1N1 This user has validated their user name.

Sun Jul 14 00:23:47 2019

The nine most terrifying words in the English language are: I'm from the government and I'm here to help.

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by: Whatever This user has validated their user name.

Sun Jul 14 09:03:42 2019

"The only way to sell used items will be via Craigslist for cash, or index cards on your local supermarket's bulletin board - all the while taking great pains to retain complete anonymity."

Looking back in time - that wasn't such a bad deal was it? I made a ton of money at the flea market - got fresh air - actually met my customers and made some great friends - ah the simpler times - and actually bartering is making a come back

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by: Disgusted This user has validated their user name.

Sun Jul 14 10:31:56 2019

Will that apply to China etc as well?  Not enforceable.

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by: thebobman This user has validated their user name.

Mon Jul 15 01:12:51 2019

I finally got some insurance this year. Its about $1,100 and covers 1 million in liability and about $200k or $250k worth of inventory ( i have about $500k of retail value). If you are doing less than $50k/year in sales, probaby bot needed, but when i hit $200k in a year, started making more sense

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by: Flying Childers This user has validated their user name.

Mon Jul 15 05:13:18 2019

No matter how bad it gets, I would rather take my chances with EBay or Etsy than “the Government.”  Especially if it’s the People’s Republic of California.  Nothing good will come of this law.  Just another huge intrusion by the Commies.  Beware of the insurance requirement- it’s a killer.

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by: BlueSky This user has validated their user name.

Mon Jul 15 13:20:38 2019

There are several basic business laws that ebay and Amazon habitually disregard to a seller's detriment. One of the key ones concern shipping and delivery. Until those are not remedied, you are in trouble as a seller.

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by: Bullet This user has validated their user name.

Mon Jul 15 13:39:59 2019

Since I live in the California Sierra foothills (wildfire country) I carry inventory and loss of income insurance through State Farm.  It costs about $30 a month.  I highly recommend it.

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