Amazon and EBay Would Face Counterfeit Liability Under New Bill

(Bloomberg) -- E-commerce platforms run by Amazon.com Inc. and EBay Inc. would face increased liability when third-party vendors on their sites sell dangerous counterfeits under a bill discussed by a U.S. House panel Thursday.

To be shielded from this liability, the bipartisan legislation would require platforms to take steps such as verifying manufacturer identity and permanently banning repeat counterfeit vendors. The bill is limited to knockoffs that pose a health risk, such as exploding iPhone chargers or non-functional personal protective equipment.

“This bill is narrow because it only deals with health and safety. In a perfect world, we would deal with every counterfeit, including quite frankly, those Gucci handbags,” Republican Representative Darrell Issa said at a hearing held by the Judiciary Committee’s panel on courts, intellectual property and the internet.

Read more: Amazon Battles Retailers Over Effort to Combat Counterfeit Goods

Currently, online marketplaces are only required to take down listings that have been reported by brands. This is more lenient than the liability structure for brick-and-mortar retailers, and removes incentive for online platforms to proactively monitor counterfeits, said Judiciary Committee Chairman Jerrold Nadler.

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