The PIC increases the risk of counterfeiting – products will shift
John Zacharia, 2023 - Professorial Lecturer in Law, George Washington University School of Law. “CONGRESS IS TRYING TO KEEP CONSUMERS SAFE FROM COUNTERFEIT GOODS ONLINE THROUGH LEGISLATION: WILL IT WORK?” The Brand Protection Professional: A Practitioner’s Journal, December, https://bpp.msu.edu/magazine/congress-trying-consumers-safe-counterfeit-goods-december2023/ //DH
Congress could protect consumers even more by applying the proposed provisions of the SHOP SAFE Act to all e-commerce platforms equally. Currently, the bill would not impose contributory trademark counterfeiting liability on platforms with less than $500,000 in annual sales unless these smaller platforms received 10 notices that a third party seller had sold counterfeit goods implicating health and safety. SHOP SAFE Act of 2023, § 2(a)(4)(D). Imposing different standards on different e-commerce platforms creates at least two unnecessary problems.
First, there is no principled reason why large e-commerce platforms should bear a heavier burden to protect consumers from counterfeit goods implicating health and safety than smaller ones. When it comes to consumer safety, Congress should not consider the size, sales or resources of a platform. All e-commerce platforms should protect consumers from harmful counterfeit goods, and Congress should impose such a requirement equally.
Second, by not compelling small e-commerce platforms to protect consumers from harmful counterfeit goods sold on these platforms sooner (as it does for large platforms), Congress would effectively authorize smaller platforms to expose consumers to counterfeit goods implicating health and safety at least 10 times without contributory liability under the bill. It is hard to imagine any other scenario where exposing consumers to harm 10 times would be acceptable. Would it be acceptable to allow a small flea market to wait until it received 10 notices that its tenants sold counterfeit toys before the market would have to take action? Would it be acceptable to allow a website’s users to peddle defective batteries (that could catch fire or even explode) 10 times before requiring the platform to act against such users? Of course not.
The simple solution: Congress should not discriminate between large and small e-commerce platforms when it comes to counterfeit goods affecting consumer health and safety.