>> JUSTIN BROOKMAN: Hello.  Thank you.  Hey, my name is Justin Brookman.  I am here today on behalf of Consumer Reports.  We are an American civil society organization, I think probably best known for testing products.  So we test thousands of products each year in our labs ‑‑ cars, smart TVs, all sorts of different things.  We also have a journalism side, and we also do policy.  So that's the side that I work on.  So I am Director of Technology Policy there, worked on issues like privacy and competition, big tech issues, broadband access, which an incredibly important issue, but also things like bias and also platform responsibility and accountability. 

I think a lot of people talk about it in terms of political misinformation, like Twitter and Facebook, enabling this information, not doing enough to protect users from harm on platforms. 

I am going to be talking about a slightly different variation on it, which is about dangerous products being sold on eCommerce platforms, like eBay or Amazon.  There's obviously a lot of benefits from these eCommerce platforms.  We have access to tens of thousands, hundreds of thousands of sellers, and maybe at least as many manufacturers, and there's real benefits to that.  And it creates competition and products can be cheaper for consumers.  The flip side is maybe tens of thousands, hundreds of thousands of manufacturers or sellers, they are not fully vetted, there's not ‑‑ maybe their products are unsafe or there's a lack of accountability there. 

I am going to talk about some of the emerging legal trends and who should think about who should be responsible for dangerous products on these platforms.  I am going to be doing it with probably a little bit more of an American focus just because that's my background and that's what I know, but obviously, I am interested in hearing others' perspectives.  I will talk a little bit about European law.  But otherwise, yeah, I think the principles about who should be responsible are relatively universal. 

So, who is liable when you buy something and it harms you if it blows up?  So traditionally, in the Western tradition, at least, there is this idea of privity.  Whoever you have contact with is the the only person you can go to.  So if you bought a hair dryer that was badly wired and it burns down your house, or at least your bathroom, you only had recourse against the store from which you bought it.  You didn't have a relationship with the manufacturer.  And so the law just didn't allow you to go to them.  But that kind of over time broke down.  The store wasn't necessarily in the best position to make the hair dryer safe.  So we start to see the law hold manufacturers and others liable as well.  Maybe they were negligent.  Maybe they didn't do the wiring right, so therefore, they have some moral responsibility and therefore should be obligated to pay.  Maybe there was warranty, either an express warranty, this will last for ten years and it doesn't, or an implied warranty.  There is some implied warranty that products are safe and aren't going to be harmful.  So over time the law has expanded to kind of research yes, sellers, but also manufacturers as well. 

And then this continued to get more expansive and say there are other places, the law is more likely to hold people responsible for what happens.  So now the sellers are, at least in American law, generally automatically liable for damages.  It's not a matter of contract.  It's not a matter of negligence.  Just that they sold something harmful that is being used as it's supposed to be used, then they are liable if consumers are harmed.  Same applies to manufacturers.  If only, like, one in a million products harms people, and even if they invest a lot more money, they couldn't have found that defect, the law is going to make them responsible and say, well, you should bear the cost of it, and then if one in a million gets harmed, then maybe you raise prices a little bit in order to make the person who is harmed whole.  If a hundred in a million, maybe you need to raise prices more.  If it's like a thousand or 10,000 in a million, maybe you will make the decision not to sell it altogether. 

So now, like lots of people can bear liability now within the supply chain.  It could be the parts manufacturer that went bad.  It could be the product manufacturer.  It can be the seller.  But the key is that the consumer, the person who got harmed, is going to be made whole, and then there can be contracts can be between the various parties to say, okay, if something goes wrong, then you will pay for it.  Or a court can say, well, the manufacturer maybe bears 70% of the cost, and maybe 30% goes to the seller.  But ‑‑ or maybe we can't find the manufacturer, so the seller bears all of it.  But the key is that the consumer, at the end of the day, should be made whole. 

So it's a little bit trickier now these days when you have online platforms that don't necessarily sell, but they kind of connect people to other sellers.  So things like Etsy and eBay, where you are buying from someone else, but you know, eBay is a place that you go, and it's maybe the place that you give your money to.  But the problem is now there are lots and lots of very small sellers and manufacturers who, if you are injured, maybe you can't find them.  Maybe it's a seller here in Katowice, and if you are harmed, you can't find them afterwards.  The question is eBay, Etsy, Amazon, other of these companies, should they be considered liable for the dangerous products that are sold on their platforms? 

Think about Amazon, they started out selling stuff directly to consumers.  You went to the Amazon store to buy a book, and it was Amazon who gave it to you, who purchased ‑‑ who packed it up and sent it to you.  But now that Amazon's changed a lot, it's transitioned to be a platform where there are thousands of different sellers on there, even including things like books, and so there was a story in The New York Times, I think last week, that the Amazon bookstore used to be pretty reliable.  You would know I am going to get the latest bestseller.  Now there are dozens, hundreds of different companies selling books on there.  And maybe there's benefits to that.  Maybe it drives down prices.  Maybe you have more options.  But there's also less quality control, and some of the listings may be confusing, and there's more potential for deception.  So it's just been an overall transition in the Amazon marketplace. 

So when we talk about platforms, there is this general concept in the law that platforms aren't responsible ‑‑ legally responsible ‑‑ for what happens on them.  So in America, this is encapsulated in Section 230 of the Communications Decency Act, which says if someone says something on your platform, you are not considered the speaker of it.  If I go on Twitter and say defamatory or illegal things, Twitter is not considered the speaker of that, and they are not liable for defamation.  This idea is also in European law.  I think I believe it's an eCommerce Directive.  It's also been transposed around the world, sometimes in trade agreements, which there's been some criticism of.  They are not democracy processes, so should a treaty between the United States and, say, Mexico and Canada, where this came up, can a country say there's no law that can hold a platform liable for speech?  And I don't think this concept was written with product sales in mind.  It makes sense, I think, to some extent, with regard to speech, though it definitely has costs as well.  But commercial transactions are generally more closely regulated and probably should be more regulated, so I don't think that Section 230 should be interpreted to dissolve people from responsibility for the products on them. 

This is a prototypical example of something that can go bad, which is hoverboards.  Often cheap.  Again, cheap is good.  But cheap has cost too.  There have been a number of cases where hoverboards purchased from overseas manufacturers, usually in China, have caused real damage, have burned down houses.  And this is one in a series of Wall Street Journal exposes into how there's all sorts of dangerous products on Amazon, and they weren't taking responsibility for it.  For at least a while.  They changed their behavior and their policy with regard to hoverboards, but for a number of years ‑‑ and there's all sorts of cheap options and potentially dangerous options that you could purchase, and Amazon's perspective was you are making a decision to buy this from this other seller.  We are just trying to let you guys meet and interact. 

But over time ‑‑ and over time, maybe like five years, maybe not even ‑‑ you are starting to see courts, at least in the United States, say well, you know, Amazon probably should be liable in this case.  Again, this is the Chinese manufacturer, again, overseas manufacturer who we can't find.  We don't actually know.  The case of Oberdorf there was the case of a dog leash, a leash that snapped back and popped the poor woman in the eye and left her blinded.  And again, she was using it as it was intended to be used, to walk a dog, but it damaged her, and they were unable to find who actually manufactured this in the first place.  She brought the case against Amazon, saying hey, I bought this on Amazon.  I paid Amazon.  I don't know who this other entity is.  And the courts agreed.  And a couple other cases there too, one about hoverboards, one person bought a replacement laptop battery.  Again, cheaper than maybe they would have gotten from Samsung, but it also then caught fire.  So definitely it's been like the trend towards saying yeah, Amazon, they are a big company, they probably should bear the cost of it, then they can make a decision about whether to sell hoverboards or batteries or other products. 

Not all.  There have definitely been some cases that have gone the other way, including that have pointed to Section 230 and saying no, Amazon is just a platform.  It's not their fault.  But I think the overall trend is more toward finding them liable.  And it's successful enough that there's legislation in California that we, Consumer Reports, worked on, that explicitly said in the eCommerce space, you bear responsibility.  The legislation was dropped because I think people felt comfortable that the California law does cover Amazon. 

So I think Amazon, of these platforms, is probably maybe the easiest case.  They are huge.  They certainly have the ability to bear costs.  And then make decisions about which products to allow to be sold on the platform.  They are a trusted brand.  And people think of themselves, still, I think, as buying on Amazon because that's how you started out.  You are buying directly from the company.  Amazon's the one that shows up on your credit card.  They process the payments.  In many cases, they actually pack it up and ship it, like they list it as fulfilled by Amazon, so they are in possession of it.  They have the ability to inspect it if they want to to see if it's safe.  They also affirmatively go out of their way to recommend certain products.  So Amazon Choice is an algorithmically driven notifier that says, hey, Amazon Choice, kind of suggesting that you buy this maybe because they have had successful sales, people have given it good ratings, but it is Amazon kind of specifically saying ‑‑ recommending you buy from a certain vendor. 

In many cases, it's not clear who it is you are purchasing from.  So in this example, this is a workbench, a workout bench I searched for, and there's a lot of information on there, but you know, if you ‑‑ you can see in the middle of the listing that the brand is identified as SpottU, which I don't know who that is.  I am not sure many people do.  Then over on the far right, it says It ships from Amazon, but it's sold by Magnitude LLC.  I am not sure who they are, I am not sure anybody does.  Because of the historical Amazon buying experience, people may not understand they are buying from Magnitude LLC.  I have no reason to think that this particular product is unsafe, but you could imagine a workout bench, if it's not put together well, designed to resist a thousand pounds, sounds like something could go wrong there.  If it goes badly, would a person be able to find SpottU or Magnitude LLC?  Again, Amazon might require Magnitude LLC to post a bond or have insurance in case something goes wrong, but that's a decision that Amazon can make. 

A couple other legal issues to consider.  There's product recalls.  Sometimes governments say okay, 20, 40 hoverboards have caught fire.  We should bring them all back.  People should not have these anymore.  They should get repaired or they should just get refunded.  Should platforms be responsible for that?  Should they have to give refunds, give their money back?  Especially if the other company has gone out of business?  In June of this year, the Consumer Product Safety Commission, which is the U.S. agency which oversees product recalls, sued Amazon and said you guys are selling tons of products on there that have been recalled.  They are fulfilled by Amazon, shipped out of Amazon warehouses.  And you know, you guys should be responsible for it.  And the outcome of that case has not been determined. 

A couple other things to consider.  There's basic consumer protection law, which in the United States says, you know, you can't commit unfair or deceptive business practices.  Deceptive is pretty easy.  You can't lie to people.  Unfair is expansive, and people aren't quite sure how far it goes.  But one thing it's been interpreted to require is companies to use data security.  So if you have personal information stored, you have to protect it.  You have to encrypt it.  You can't just leave it out there accessible to attackers or hackers. 

You can imagine regulators kind of saying a similar thing on eCommerce platforms.  If there is low‑hanging fruit, basic things you can do to make the product safer, again, this is not maybe strict liability, but more of a reasonableness test.  Do you have an obligation to monitor for potential damaging products?  Do you have to take things down proactively?  This is kind of a different issue, but I think it's relevant about there are tons of fake reviews on sites like Amazon that could convince someone that, hey, this is a good, safe product.  Should you have some obligation if all the reviews are coming from the same IP address and seem to be badly translated?  Do you have an obligation to find those and take those down?  I think you could make an argument that these platforms do have some, again, reasonable duty.  It's not strict, but they should take cost‑effective measures to protect their platform users from harm. 

Okay.  So I think, like I said, Amazon I think is easier, but there are other kinds of platforms too I think it's maybe harder to make the case that they should be liable for dangerous products.  So eBay and Etsy, I think, you know, in many cases it feels more like that's connecting you to another person that eBay really is just an intermediary.  You are buying a hand‑crafted thing from a small seller in Minnesota.  I think even ‑‑ and others are probably even more divorced, like Craigslist and classified ads, where it says just come over to our house and pick up the bike, and I'll give you a hundred bucks.  Craigslist, in this case, doesn't actually take possession of anything.  They don't process a payment.  They don't deal with the money.  And obviously, you could do this over, like, social media or email.  You could say hey, you want to buy a bike?  I don't think the communications platform, just because they are involved in a sale, is going to be ‑‑ should be held strictly liable for an explosion from a product that was unsafe. 

But the question is where should that line be drawn?  Somewhere past Amazon, maybe including eBay and Etsy, but it really depends on the facts.  So trying to think through what the criteria are for when a platform should be liable for dangerous products, you know, if they are in possession of the products, do they have a chance to inspect them?  Do they fulfill the order?  Maybe those are factors in the criteria.  Likelihood of harm, if they are inherently dangerous product, maybe there should be some duty of inspection or more care should be exercised.  If the platform makes money from it, like that probably argues in favor of responsibility.  Processing payment, I think, probably is important.  Again, it does feel like you are giving the money to the platform, and I think that probably should be a pretty important factor in the analysis. 

You know, disclosures to consumers, like how much do people ‑‑ what do they see?  What do they expect based on what they are told about this commercial transaction?  You know, it depends on the products.  I think things that are handmade or used, probably less responsibility for the platform because they don't ‑‑ again, these products are going to be all different by nature, and you know, it's harder for the platform to maybe exercise discretion and oversight. 

Algorithmic recommendations, these are all things, and the law is very much unsettled.  Like I said, the cases have tended to hold Amazon responsible, but there's definitely a lot of uncertainty, even in the U.S., where there's been some case law on this. 

So I think as we move on, there's just going to need to be more certainty.  Obviously, I am not recommending an 11‑part or whatever this is ‑part test.  That's not workable.  I think the law is going to have to provide more certainty, both to consumers and merchants. 

This is something other countries are talking about as well.  Europe has similar platform immunity defaults as the United States does, but as that's being reconsidered with regard to speech and misinformation, probably being reconsidered with regard to platforms as well.  There's the Digital Services Act that's being debated in European Parliament and European policy‑making bodies.  And they do kind of pull back on immunity a little bit and say if you are aware of illegality, you may have an obligation to take down speech and potentially products as well.  There's also been discussion of a general product safety regulation to replace the existing directive to provide a more harmonized law across Europe.  And the BEUC, a civil society organization in Europe, has criticized that as not taking on this issue ‑‑ this specific issue about the role that eCommerce platforms should play with regard to product safety. 

And so just to wrap up, you know, what I think the end game looks like is I think there needs to be more clarity on what aspects of a platform should trigger product liability for defective products.  I think it probably should be fairly aggressive.  Again, these platforms, Amazon yes, but I think even the eBays and Etsys of the world, they can require things like insurance.  They can require things of sellers on there better positioned than, say, the user, the consumer, who is not really well positioned to evaluate which merchants are the most reliable. 

Also, even when there's not strict liability, clarity on when there are obligations to monitor, to respond to complaints, say take down bad listings.  And right now, the law is very unclear on that.  I think probably, whether through enforcement of existing law or through new regulation, probably more obligations on platforms to take more responsibility for what happens on them. 

And then maybe some specific mandates.  Again, like transparency.  Maybe they should be required to take identifying information from all these merchants.  Some of those cases against Amazon, they were just unable to find the person who had sold the goods in the first place.  Maybe requiring information so they can be contacted, requiring insurance, requiring a bond, potentially, in case something goes wrong.  Maybe you are requiring service of process in jurisdictions they operate, so if something does go wrong, then the consumer can file a suit against them and potentially recover. 

And then finally, I think just empowering and funding regulators.  This is one of the biggest problems, that there are some laws that could be enforced right now, but at least in the United States, regulators are woefully understaffed and underfunded and underpowered.  Even if they do bring a case against a company for a violation of consumer protection laws, they often can't get penalties.  There's no consequences.  So it doesn't really put the fear of God into companies that they need to adhere to existing laws.  So I think giving regulators more resources, specifically to look at this issue, to look at platform responsibility issues, is, I think, a good idea.  Private enforcement, again, you know, empower consumers to bring cases against platforms when something does go wrong.  This is an area where the United States actually does a fairly good job on product issues.  Other countries around the world, it's harder to get access to the courts to get recovery for defective products.  So another thing that folks should think about when considering ways to deal with the issue of damaging products. 

With that, that wraps up my talk.  I don't know if anyone has questions or thoughts, either online or off.  I don't see any comments.  Do we have one?  Thank you. 

>> Thank you for your great presentation.  I would like to ask about the private enforcement.  What do you mean by private enforcement?  (Off microphone)

>> JUSTIN BROOKMAN: So the question is about what does private enforcement look like.  Certainly the government should have the ability to mandate product recalls and to fine, if you are not taking reasonable steps when something goes wrong.  Private enforcement, in these cases, again, if you were the one who got the leash snapped in the eye or the hoverboard burned down your house, then you have access to the courts to, say, then sue Amazon or whatever body would be responsible and to obtain relief from them.  Hey, my house burned down, I am going to you, Amazon, because you have a lot of money, and you sold me the product.  Maybe on the back end, Amazon can recover from whatever manufacturer it was, if he can this find them.  Again, the idea that the consumer, at the end of the day, needs to be made whole, should have access to courts and legal process to do that.  And then, you know, the Amazon and the manufacturer and the seller can work out between them who is going to pay what, and that could be a matter of contract, or that could be a matter of the courts. 

Thank you very much for those watching online, thank you for folks here, and happy to connect, again, my name is Justin Brookman.  You can reach me at [email protected] if you have questions about this or other U.S. tech policy issues.  Thank you very much.