Rep. Jerry Nadler Pushing New Bill That Will Destroy Online Commerce; Make Sure Only Amazon Can Afford The Liability

from the how-does-this-help dept

‘Tis the season for terrible, horrible, no good bills to destroy the open internet. First up, we’ve got Rep. Jerry Nadler, a close friend of the always anti-internet lobbying force that is the legacy copyright industries. Earlier this year he introduced the SHOP SAFE Act, which is due for a markup tomorrow, and has an unfortunately high likelihood of passing out of committee. The principle behind the Act (which Nadler has now updated with a manager’s amendment) is that “something must be done” about people buying counterfeit goods online.

Not addressed, at all, is whether or not counterfeit goods online are actually a real problem. I know that industry folks always insist that counterfeiting is a scourge that costs billions, but actual research on this shows something different entirely. A GAO report from years back showed that most of the stats regarding counterfeiting are completely exaggerated and multiples studies have shown that — far from “tricking” people — most people who buy counterfeits know exactly what they’re doing, and that for many buyers, buying a counterfeit is an aspirational purchase. That is, they know they’re not buying the real thing, but they’re buying the counterfeit because that’s what they can afford — and if they can afford the real thing at a later date, they will buy it. But nearly all of the public commentary on counterfeiting assumes that the public is clueless, and being “tricked” into buying “dangerous” counterfeits.

The second bad premise behind the SHOP SAFE Act is that the “real problem” is Section 230 (because everyone wants to assume that Section 230 can be blamed for anything bad online). So the core approach of the SHOP SAFE Act is to add liability to websites that allow people to sell stuff online. However, as EFF notes in its write up about the problems with this bill, if you try to sell something via Craigslist or even just via Gmail, the bill would effectively make those companies liable for your sale.

One measure platforms would have to take under SHOP SAFE is verifying the identity, address, and contact information of any third-party seller who uses their services. Imagine if you had to provide a copy of your driver’s license to Craigslist just to advertise your garage sale or sell a used bike. As over the top as that seems, it’s even worse when you think about how this would apply to services like Gmail or Facebook. Should you really have to provide ID to open an email account, just in case you sell something using it? Requirements like this threaten not only competition but user privacy, too.

I don’t know why we need to keep explaining this, but when you add more liability to internet platforms, you get fewer internet platforms. This bill would effectively lock in Amazon and a few other giant companies as the only ones who could leap through the convoluted bureaucratic (and privacy-destructive) nonsense that this bill requires. Again, from EFF:

Other provisions of SHOP SAFE put the burden of rooting out counterfeits on platforms, rather than on the trademark holders who are in the best position to know a real from a fake. Most concerning to us is the requirement that platforms implement “proactive technological measures” for pre-screening listings. This provision echoes calls for mandatory automated content filtering in the copyright context.

Just a few months ago, I wrote about a trial regarding claims of counterfeit goods in an online marketplace, and just how much the lawyers leaned on the fact that the platform must know what’s real and what’s not (when even the trademark holder’s own representative admitted she wasn’t sure which products were real and which were counterfeit). Yet this bill, like so many other bad intermediary liability laws, presupposes that platforms — which often have to handle millions of new product listings — can magically stop all counterfeits from appearing.

It’s disappointing (if not at all surprising) that the ABA’s “Intellectual Property Law Section” is super thrilled with this bill (I mean, it’s like a full employment act for IP lawyers) and claims that it will “facilitated robust e-commerce removal and reporting” in a manner that makes it sound similar to the DMCA’s safe harbor provisions (which already have significant overblocking problems). But as EFF notes, this takes the entire principle of the safe harbor (“you’re protected from liability if you take these steps”) and flips it on its head.

SHOP SAFE’s requirements go far beyond the DMCA’s, while lacking safeguards like a counternotice procedure and penalties for bad-faith takedowns. SHOP SAFE also takes the DMCA’s safe harbor structure and flips it upside down. The DMCA incentivizes platforms to adopt certain policies and practices by providing a true safe harbor—that is, platforms that choose to satisfy the safe harbor requirements can be confident that they cannot be held liable for infringement by their users. SHOP SAFE doesn’t work this way. Instead, it creates a new, independent basis for secondary infringement liability, and it directs that all covered platforms must implement a range of practices or else be held liable for any trademark infringement by their users. The DMCA’s safe harbor framework is preferable because it incentivizes desired behavior while maintaining flexibility for different approaches by different platforms according to their unique characteristics.

Everything about the SHOP SAFE Act seems designed to create problems for the open internet. I know that Rep. Nadler doesn’t care about that, but you and I should. Anyone who regularly relies on the internet for buying and selling things should be concerned about this bill and what it will do to the internet. It will make it that much harder for you and I to buy or sell stuff. It will give more power to the giant e-commerce companies, such as Amazon, who can handle the regulatory burdens here, but it will make it nearly impossible for competitors to come along, and will make it effectively impossible for people to do more informal sales to each other using the internet as an intermediary.

It’s a dangerous bill and it should not move forward in its current form.

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Companies: amazon

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Comments on “Rep. Jerry Nadler Pushing New Bill That Will Destroy Online Commerce; Make Sure Only Amazon Can Afford The Liability”

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21 Comments
sumgaisays:

Remember.....

… when the major platorms held an "Internet Blackout Day", back when Congress (the opposite of progress) was debating SOPA/PIPA?

If seller’s platforms, and not just the biggies like Amazon, Alibaba, etc., were to simply shutter their portals for 24 hours, you can bet that Nadler et al will get more than an email-inbox full of angry messages to the effect that he’d better have another think about this.

sumgaisays:

On second thought....

It seems to me that most of the players will simply move offshore, if they haven’t already done so, and thus the IRS will come up short in thet

Not very long after that point, you can expect the VPN sector to become the single largest slice of the pie vis-a-vis what internet service is most often used by Americans. And overseas payment processors will become the second largest service providers.

This is not going to work out the way Nadler thinks it will. But then again, why should a Congresscritter ever think about the ramifications of any legislation – it won’t apply to him/her, and they still get the same paycheck at the end of the month.

If you were to ask me, I’d say that accountability should start at home, where the laws are made in the first place. Most plumbers will tell you that shit does not run uphill.

Jojosays:

Awww shit here we go again...

This bill is not only anti-consumer and anti-competitive, shop SAFE is anti-economic. Much like the other critics of Section 230, this bill reeks of an extremely naive, extremely misguided assumption that the only thing in the internet are the bigwigs and section 230. So, the thought always come down to control is the bigwigs online, fuck everything else. But what they don’t realize is that these solutions is like feeding Godzilla a nuclear bomb. And since we’re possibly heading into a recession during the pandemic (which makes offline shopping significantly difficult), the last thing we need right now is to make online third-party commerce impossible.

With this being said, outside of getting out of committee, I highly doubt that Shop SAFE would be able to sail through Congress. Especially right now, when even something as simple as suspending the debt ceiling is a Herculean effort.

Anonymoussays:

Another of the issues here is that the bill, and the type of people who support that sort of thing, are constantly conflating all manners of things called "counterfeit". Whether it’s a purse, DVD, or drugs, they see no difference between these, and don’t want to, as they want to apply possible dangers from extreme cases to "oh hey that t shirt kinda looks like something someone else made".

That One Guysays:

You know who doesn't have enough power? Amazon.

It’d be far more accurate to call it the ‘Amazon Entrenchment and Economic Devastation Bill’, as this will gut the online sales industry and give even more power to the handful of already large companies ensuring that no competitors will be able to pop up to challenge them, not to mention scythe through online sales and seriously undermine the economy by causing those to tank.

Congrats Nadler, your PR/spite stunt stands to make large companies even more powerful and royally screw over the economy by gutting a vital part of it during a pandemic, truly achievements worthy of praise.

sumgaisays:

Re: On second thought....

Sorry, that first paragraph got cut short. (And I didn’t see it in the Preview.)

… and thus the IRS will come up short in the Taxes From Internet Sales department.

(My fookin’ touchpad thinks that if I’m sitting in my chair with the laptop turned on, then I must want the cursor to jump all over the place, and wipe out what I had just typed. No 3rd party software works to disable the "touch to click" bug. Thanks, Dell, just thanks all to Hell and back.)

Anonymoussays:

Re: Awww shit here we go again...

"With this being said, outside of getting out of committee, I highly doubt that Shop SAFE would be able to sail through Congress. Especially right now, when even something as simple as suspending the debt ceiling is a Herculean effort."

When has that ever stopped bad bills from getting through?

Also another company that would be serverely affected by this is Ebay considering users buying and selling stuff on their is it’s lifeblood.

Instead of blaming the company, how about we do the radical thing and I don’t know, go after the person pushing counterfeit goods OH WAIT THEY ALREADY DO THAT.

sumgaisays:

Re: Re: Re: On second thought....

^ It’s been considered, but the side arms of the chair are pretty close, and wouldn’t support a large-enough are for the mouse to move around.

Ubuntu and derivatives aren’t any better than Windows in controlling this, but I’ve been hearing some good things about Zorin OS… I’m about to load up a USB stick with one of their ISO’s and see what’s what.

sumgaisays:

Re:

This nation’s declining (evermore rapidly declining) IQ is what happened to "Buyer Beware". You can expect that in any election, a few bat-shit crazies are going to vote for the assclown of the week. But 73 million of them?? That’s not crazy in any form, that’s simple ignorance, and each and every one of them is proud of being willfully ignorant. So why would anyone pay attention to what they’re buying, online or in a brick-and-mortar store? They’ve already proven they particpate daily in aeronautical intercourse with rotating pastries, haven’t they?

Nadler is trying to lure some of them back from being massacred at the pending Trumptown Flavor-Aid-a-thon by claiming that he is looking out for them. Talk about a lose-lose situation, someone’s gonna have a serious case of the jaws when this is all over.

Jojosays:

Re:

Outside of committee, it’s too early to tell. The bill as far as I know doesn’t have a sponsor yet. But if I was a guessing man, I would say kinda unlikely. Congress is currently more focused on domestic issues and I don’t think that reform on section 230 isn’t the top of the list. There’s a possibility that SAFE could sneak into becoming a law by being attached to a year-end Omnibus Bill. Or it could gain momentum months later and go through the motions of the legislative process. Frankly all we can do right now is protest and/or speculate.

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