ITIF hosted a discussion on the impact of recent court rulings and proposed legislative changes to product liability laws on online marketplaces in the rapidly changing retail environment.

Should Online Marketplaces Be Liable for Defective Products?

The FTC should develop voluntary standards for detecting and preventing fake reviews on digital platforms.

To Do: Prevent Fake Reviews

U.S.-based online marketplaces offer superior consumer protections compared to Chinese-based platforms which fail to meet consumer expectations, according to a new report from the Center for Data Innovation. The report evaluates consumer protection measures among popular online marketplaces in the U.S., including AliExpress, Amazon, DHGate, eBay, Etsy, Houzz, Meta Platforms, Newegg, Temu, Walmart, and Wayfair.

U.S. Outperforms China in Online Consumer Protection Satisfaction

Increasing liability for online marketplaces would hamper this growth, as online marketplaces would likely limit the sellers and products on their platform to minimize their risk, cutting off consumers from many legitimate options in the process.

Don’t Blame Online Marketplaces for Defective Products

Don't Blame Online Marketplaces for Defective Products

While online reviews help consumers make informed decisions on products and companies and inform companies about consumer experiences, some bad actors use deceptive practices, including submitting fake reviews, to manipulate consumer behavior and businesses' reputations.

Comments to the Federal Trade Commission Regarding Proposed Rulemaking to Address Fake Reviews

As policymakers worldwide explore new anti-counterfeiting measures in their regions, a consensus is emerging in the United States and the EU on best practices for e-commerce platforms to combat online sales of counterfeit goods.

Best Practices to Combat Online Sale of Counterfeits in the EU and US

The FTC should not punish companies for rules that do not exist.

The FTC Should Reward, Not Penalize, Companies that Innovate in Good Faith

Unfortunately, as the economy has become more innovation-based, there has been considerably less focus on how regulatory agencies can both protect consumers from harm and avoid undermining incentives for innovation.

Comments to the Federal Trade Commission on Competition and Consumer Protection in the 21st Century

Extending liability beyond sellers to include the digital platforms they use to reach consumers would undercut the viability of many online marketplaces while doing very little to improve product safety. It would only leave consumers worse off in the long run.

To Do: Develop Best Practices for Buyer Protection Programs

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From Cart to Claim: Addressing Product Liability in Online Marketplaces

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Should Online Marketplaces Be Liable for Defective Products?

To Do: Prevent Fake Reviews

U.S. Outperforms China in Online Consumer Protection Satisfaction