AB 3262 Amendments Made Suing Small Businesses Easier

Date: August 27, 2020

Expanding online marketplace liability made a bad bill worse

August 24 amendments proposed for Assembly Bill 3262 would only exacerbate an already bad idea, according to the state’s largest and leading small-business association.

NFIB testified earlier before the Senate Judiciary Committee on its opposition to AB 3262, stating that the bill increases liability on all online marketplaces, including the small online marketplaces relied upon by many small businesses. NFIB’s concern is that the bill erodes the ability of small- and medium-sized businesses from using their digital platforms.

But subsequent amendments revealed on August 24 make the bill worse by expanding the scope to cover businesses ‘facilitating the placement of products into the stream of commerce.’

“Given the vague language in the bill, it is unclear which business owners will be covered under the definition of ‘electronic retail marketplace’ (ERM) and whether their activities constitute ‘facilitating’ the placement of products into the stream of commerce leading to liability,” said John Kabateck, California state director for NFIB.

In an NFIB survey of our members this week, 68% identified ‘increased liability’ as a significant concern for them right now. “This bill will compound their existing fears, frustrations and inability to stay afloat during the COVID crisis,” said Kabateck. “AB 3262 should be rejected. The policy is harmful, the last-minute amendments are flawed, and the timing could not be worse.”



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