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Anyone with a legal background can you shed light on the ramifications for other platform plays? Is this just because they say its from Amazon or more any marke

by bwb 7y ago

Anyone with a legal background can you shed light on the ramifications for other platform plays? Is this just because they say its from Amazon or more any marketplace?

kevingadd 7y ago
IANAL, but this is covered in the article: In Wednesday’s opinion, Circuit Judge Jane Richards Roth, writing for a 2-1 majority of a three-judge panel, said Amazon may be liable in part because its business model “enables third-party vendors to conceal themselves from the customer, leaving customers injured by defective products with no direct recourse to the third-party vendor.” For context, concealment is bad here because co-mingling means Amazon doesn't even know which vendor shipped the defective product (and as mentioned in past posts on HN, they also blame the wrong vendor sometimes.) The fact that in this case the bad actor up and vanished is just unacceptable.
- JMTQp8lwXL 7y ago
  If I was Amazon, I would start tracking which vendor supplied a particular instance of a product. Seems less costly than dealing with owning the liability of third-party vendors.
  - kevingadd 7y ago
    You can supposedly opt out of co-mingling now, and I do wonder how much money they really save by doing it. A few expensive legal penalties might be enough to kill the program.
    - CamelCaseName 7y ago
      They are shifting part of this cost onto sellers with the Transparency program. My company has had a few calls with Transparency reps and will be enrolling in the coming months.
  - ikeboy 7y ago
    They've been tracking that since the beginning.
- r00fus 7y ago
  Co-mingling allowed Amazon to cut the "real" vendors from the piece of the pie, and make tons of money from having "hundreds" of options (all looking like the original). Case in point: you couldn't buy an Apple product from Amazon without getting a fake, even though the listing said "Apple". Why it took this long to get Amazon to be liable bewilders me.
- AnssiH 7y ago
  > For context, concealment is bad here because co-mingling means Amazon doesn't even know which vendor shipped the defective product That is not true. From Amazon documentation on commingling: > Note: Amazon ensures that the initial source of the commingled units can be traced throughout the fulfilment process. > How does Amazon track my commingled inventory? > Even though your inventory does not have additional labels, Amazon will assign a virtual trackable label to your units once they have been received. Virtual trackable labels allow Amazon to keep a track of your inventory at all the times. > Important: Amazon ensures that the exact same units from two sellers, participating in the commingling programme, are always physically segregated. This means that Amazon storage logic does not allow same ASINs of different sellers to be stored in the same bin in our warehouse if they are commingled.
  - tmd83 7y ago
    Can you please clarify this a little more. I thought I read in HN many times that commingled items can be supplied from any vendors supply and not the one a buyer chose. What does it mean that they track it but don't ensure that proper items are delivered and what's the advantage of amazon to commingle. Another thing is if Amazon actually fulfill one buyer's sell through another's supply how is this not a fraud by amazon and how they are not sued out of business even without any fake item issue? This is one thing I never understood.
    - AnssiH 7y ago
      > I thought I read in HN many times that commingled items can be supplied from any vendors supply and not the one a buyer chose. Correct. > What does it mean that they track it but don't ensure that proper items are delivered It means Amazon can send an item originally supplied by any seller, but Amazon will know who the original seller was. > and what's the advantage of amazon to commingle. Reduced fulfillment cost by e.g. having the stock closer to the buyer and reducing the need to ship orders from multiple warehouses (due to orders containing various different products and/or different sellers), as they have more inventory of that product to distribute throughout their warehouses. > Another thing is if Amazon actually fulfill one buyer's sell through another's supply how is this not a fraud by amazon and how they are not sued out of business even without any fake item issue? Both sellers have agreed to commingling. When you buy from seller A but seller B has stock closer, sellers A and B will perform a trade (automatically) where A gets one item of B's stock and B gets one item of A's stock. And then the now A's item will be shipped to customer. So at the time of shipping it is A's item, as the customer ordered.
elliekelly 7y ago
The court was careful to only make the determination that Amazon was a “seller” in this specific instance because of Amazon’s role in the sale. From the opinion[1]: > Our decision, guided by Pennsylvania law, is limited to the question of whether Amazon is a “seller” based on its role in effectuating sales of physical products offered by third-party vendors. We express no view, for example, on whether other companies providing online marketplaces are considered “sellers.” There were four factors the court used to help determine that Amazon was a “seller” (starting on page 12 of the opinion) and they all went against Amazon. [1] https://www2.ca3.uscourts.gov/opinarch/181041p.pdf https://www2.ca3.uscourts.gov/opinarch/181041p.pdf
- DreamSpinner 7y ago
  Thankyou for the link - it's quite interesting. Here's the section: In its opinion, the Pennsylvania Supreme Court made clear that courts later tasked with determining whether an actor is a “seller” should consider whether the following four factors apply: (1) Whether the actor is the “only member of the marketing chain available to the injured plaintiff for redress”; (2) Whether “imposition of strict liability upon the [actor] serves as an incentive to safety”; (3) Whether the actor is “in a better position than the consumer to prevent the circulation of defective products”; and (4) Whether “[t]he [actor] can distribute the cost of compensating for injuries resulting from defects by charging for it in his business, i.e., by adjustment of the rental terms.”
  - elliekelly 7y ago
    What’s interesting too is the court could have concluded their reasoning with this four-factor analysis but then the ruling would most certainly be limited to Pennsylvania. So while they explicitly said they aren’t making the determination for marketplaces other than Amazon they do go through the effort in Section B (page 21) to lay out additional rationale/legal justification that brings Amazon’s actions within the meaning of “seller” in other jurisdictions as well.
inopinatus 7y ago
Not a lawyer but I run a marketplace. Anticipating exactly this kind of situation we require a clear display of the transaction principal, run a limited KYC check for each new onboarding, and (since the main product leads to participation in physical activities) each seller warrants their public liability insurance cover and indemnifies us against various breaches and circumstances.

by bwb 7y ago

Anyone with a legal background can you shed light on the ramifications for other platform plays? Is this just because they say its from Amazon or more any marketplace?

kevingadd 7y ago

IANAL, but this is covered in the article: In Wednesday’s opinion, Circuit Judge Jane Richards Roth, writing for a 2-1 majority of a three-judge panel, said Amazon may be liable in part because its business model “enables third-party vendors to conceal themselves from the customer, leaving customers injured by defective products with no direct recourse to the third-party vendor.” For context, concealment is bad here because co-mingling means Amazon doesn't even know which vendor shipped the defective product (and as mentioned in past posts on HN, they also blame the wrong vendor sometimes.) The fact that in this case the bad actor up and vanished is just unacceptable.

JMTQp8lwXL 7y ago
If I was Amazon, I would start tracking which vendor supplied a particular instance of a product. Seems less costly than dealing with owning the liability of third-party vendors.
- kevingadd 7y ago
  You can supposedly opt out of co-mingling now, and I do wonder how much money they really save by doing it. A few expensive legal penalties might be enough to kill the program.
  - CamelCaseName 7y ago
    They are shifting part of this cost onto sellers with the Transparency program. My company has had a few calls with Transparency reps and will be enrolling in the coming months.
- ikeboy 7y ago
  They've been tracking that since the beginning.
r00fus 7y ago
Co-mingling allowed Amazon to cut the "real" vendors from the piece of the pie, and make tons of money from having "hundreds" of options (all looking like the original). Case in point: you couldn't buy an Apple product from Amazon without getting a fake, even though the listing said "Apple". Why it took this long to get Amazon to be liable bewilders me.
AnssiH 7y ago
> For context, concealment is bad here because co-mingling means Amazon doesn't even know which vendor shipped the defective product That is not true. From Amazon documentation on commingling: > Note: Amazon ensures that the initial source of the commingled units can be traced throughout the fulfilment process. > How does Amazon track my commingled inventory? > Even though your inventory does not have additional labels, Amazon will assign a virtual trackable label to your units once they have been received. Virtual trackable labels allow Amazon to keep a track of your inventory at all the times. > Important: Amazon ensures that the exact same units from two sellers, participating in the commingling programme, are always physically segregated. This means that Amazon storage logic does not allow same ASINs of different sellers to be stored in the same bin in our warehouse if they are commingled.
- tmd83 7y ago
  Can you please clarify this a little more. I thought I read in HN many times that commingled items can be supplied from any vendors supply and not the one a buyer chose. What does it mean that they track it but don't ensure that proper items are delivered and what's the advantage of amazon to commingle. Another thing is if Amazon actually fulfill one buyer's sell through another's supply how is this not a fraud by amazon and how they are not sued out of business even without any fake item issue? This is one thing I never understood.
  - AnssiH 7y ago
    > I thought I read in HN many times that commingled items can be supplied from any vendors supply and not the one a buyer chose. Correct. > What does it mean that they track it but don't ensure that proper items are delivered It means Amazon can send an item originally supplied by any seller, but Amazon will know who the original seller was. > and what's the advantage of amazon to commingle. Reduced fulfillment cost by e.g. having the stock closer to the buyer and reducing the need to ship orders from multiple warehouses (due to orders containing various different products and/or different sellers), as they have more inventory of that product to distribute throughout their warehouses. > Another thing is if Amazon actually fulfill one buyer's sell through another's supply how is this not a fraud by amazon and how they are not sued out of business even without any fake item issue? Both sellers have agreed to commingling. When you buy from seller A but seller B has stock closer, sellers A and B will perform a trade (automatically) where A gets one item of B's stock and B gets one item of A's stock. And then the now A's item will be shipped to customer. So at the time of shipping it is A's item, as the customer ordered.

elliekelly 7y ago

The court was careful to only make the determination that Amazon was a “seller” in this specific instance because of Amazon’s role in the sale. From the opinion[1]: > Our decision, guided by Pennsylvania law, is limited to the question of whether Amazon is a “seller” based on its role in effectuating sales of physical products offered by third-party vendors. We express no view, for example, on whether other companies providing online marketplaces are considered “sellers.” There were four factors the court used to help determine that Amazon was a “seller” (starting on page 12 of the opinion) and they all went against Amazon. [1] https://www2.ca3.uscourts.gov/opinarch/181041p.pdf https://www2.ca3.uscourts.gov/opinarch/181041p.pdf

DreamSpinner 7y ago
Thankyou for the link - it's quite interesting. Here's the section: In its opinion, the Pennsylvania Supreme Court made clear that courts later tasked with determining whether an actor is a “seller” should consider whether the following four factors apply: (1) Whether the actor is the “only member of the marketing chain available to the injured plaintiff for redress”; (2) Whether “imposition of strict liability upon the [actor] serves as an incentive to safety”; (3) Whether the actor is “in a better position than the consumer to prevent the circulation of defective products”; and (4) Whether “[t]he [actor] can distribute the cost of compensating for injuries resulting from defects by charging for it in his business, i.e., by adjustment of the rental terms.”
- elliekelly 7y ago
  What’s interesting too is the court could have concluded their reasoning with this four-factor analysis but then the ruling would most certainly be limited to Pennsylvania. So while they explicitly said they aren’t making the determination for marketplaces other than Amazon they do go through the effort in Section B (page 21) to lay out additional rationale/legal justification that brings Amazon’s actions within the meaning of “seller” in other jurisdictions as well.

inopinatus 7y ago

Not a lawyer but I run a marketplace. Anticipating exactly this kind of situation we require a clear display of the transaction principal, run a limited KYC check for each new onboarding, and (since the main product leads to participation in physical activities) each seller warrants their public liability insurance cover and indemnifies us against various breaches and circumstances.