Amazon Marketplace: Liability in the Cloud?

I don’t usually blog “personal” stories, but this one is irresistible. It raises disturbing questions at the border of digital and physical life, and legal problems of trademark and the emerging issues of cloud computing and data liability.

EBay, as everyone knows, has been struggling to improve its customer experience in the light of disappointing results in the last few years. One problem in particular that the company has worked hard to address is the problem of sellers who either misrepresent their items or otherwise underperform in the transaction, tarnishing the image of eBay in the process.

There are of course legal consequences to some of these problems as well. EBay has been the subject of numerous lawsuits in the U.S. and abroad from trademark holders claiming that eBay sellers are offering knock-off or forged goods as branded merchandise, or selling items outside the often-strict terms under which authorized merchants may sell branded goods. (For example, selling outside assigned geographic territory, or selling below the authorized price or terms.)

I’ve written extensively about the eBay litigation, including lawsuits brought by Tiffany in the U.S. and the Louis Vuitton brands in France. The question in these cases comes down to a definition of what eBay actually “is”—a department store responsible for the merchandise sold on its premises (liable) or a community bulletin board offered as a convenience to connect buyers and sellers of a variety of unrelated products and services (not liable).

EBay is neither of these things—it is an example of a new kind of virtual marketplace enabled by digital technology. But the law here, as elsewhere, has not kept up with the changing realities of digital life, leaving judges to struggle with analogies that just don’t fit. EBay has scored strong victories in the U.S., and significant losses abroad. Whatever the results in these cases, the legal reasoning is always hopeless and the opinions useless as precedent. The law evolves slowly.

(In a new twist, just the other week eBay was ordered to pay over $300,000 by a French court in another dispute with Louis Vuitton. This one involved eBay’s practice of purchasing advertising keywords that were common misspellings of LVMH marks that directed searches to eBay. EBay is appealing.)

Amazon’s third-party Marketplace, which has eaten into eBay’s market significantly over the years, has largely avoided these public legal skirmishes. Brand holders and their distributors may prefer to sell through Amazon than eBay, giving an incentive not to litigate when problems do arise. Amazon also manages a much smaller and generally more professional group of third party merchants than does eBay and, it appears, exercises more vigorous policing over the items that appear under the Amazon banner but which in fact are sold and distributed by third parties.

Well, maybe not. Recently I purchased a replacement camera battery from an Amazon third party merchant. (You can find the listing here, though I strongly suspect it will be changed or disabled very shortly for reasons that will become clear in a moment.)

For the rest of the story, see "Note to Ebay: A Chink in Amazon's Armor?"

Add new comment