Only large companies can bear the cost of enforcement – the plan causes market consolidation of e-commerce
Engine, 2020 - Engine is a non-profit technology policy, research, and advocacy organization that bridges the gap between policymakers and startups. Comment submitted to US Patent and Trademark Office, “Re: Comments of Engine Advocacy in Response to Secondary Trademark Infringement Liability in the E-Commerce Setting, Docket No. PTO-T-2020-0035,” 12/28, https://downloads.regulations.gov/PTO-T-2020-0035-0008/attachment_1.pdf //DH
Indeed, even under the current, relatively balanced approach to contributory liability, the high costs of monitoring and covering legal risk for potentially infringing user-generated posts are already seen as a competitive advantage. Changing the law to increase those costs and risk, by imposing more liability on platforms, would entrench incumbents and defeat the ability of nascent companies to compete.22 As scholars have noted:
[W]hile the eBays of the world can afford to spend millions of dollars combatting counterfeiting, this may not be the case for smaller-scale market participants. Requiring “mom and pop” online brokers to wage a million-dollar war against counterfeiting would likely drive these retailers out of business, undesirably narrowing consumer choice.23
Finally, most platforms experience little, if any, alleged trademark infringement.24 Changing the law to increase the costs and risks platforms face would therefore catch little, if any, additional infringement.25 But the costs and risks of a shift in liability would be substantial, which would make it harder for startups and emerging e-commerce platforms to launch and compete, and restrict economic growth in multiple sectors.26