Platforms are liable of what they do: so says a ruling of the California Court of Appeals by Andrea Monti – originally published in Italian by Wired.it
The Bolger vs Amazon.com Inc. ruling, issued by the California Court of Appeals on August 13, overturns the first-degree verdict and establishes Amazon.com is liable for damages caused by products made available through its website, also if the customer buys from a seller operating in the marketplace in “Fulfilled by Amazon” mode.
In the process, Amazon used the classic Over the Top defences (the platforms that ‘rely’ on access providers to offer their services), claiming that they are not part of the legal relationship between seller and buyer, that they ‘simply’ provided infrastructure, and that they cannot be held responsible for product claims coming from the actual seller.
The grounds for the judgment
In the almost fifty-page judgment, the judges of the Californian Court of Appeal challenge the e-commerce giant’s defences point by point.
Firstly, the Court reiterates a principle (also valid on this side of the ocean): when an online operator becomes an active part (and, in Amazon’s case, an important one) of the sales process, he cannot ‘call himself out’ if the end customer suffers personal injury.
The sale in ‘Fulfilled by Amazon’ mode, the Court remarks, is much more than merely providing an infrastructure to put supply and demand in contact. ‘Seller’s side’ Amazon imposes stringent rules on price, quality and safety, and reserves the right not to market the product.
‘Customer Side’ Amazon manages the contact with the buyer, the purchase and collection process, shipping, also offers the ‘A to Z Warranty’ and creates an ecosystem of trust and reliability.
The extension of trust generated by Amazon
The judges, therefore, also valued as part of the platform’s responsibility, the trust induced by purchasing something not only ‘from’ but also ‘through’ Amazon. In other words, Amazon’s reputation is so high that the buyer feels “guaranteed” by the platform also if, in strictly legal terms, the seller is someone else. So, while it is true that in theory, the online service provider is a simple intermediary with no responsibilities, in practice Amazon has a way of managing sellers and buyers that identifies it as a structural element of the sales chain of which it is an essential part.
Marketing statements are as valid as the contractual terms and conditions.
The ruling slims the difference between ‘marketing’ claim and contractual terms and conditions. The former, indeed, can also represent a source of contractual obligation, and therefore of responsibility, for the seller. It is worth little, writes the Court, to object that contractually Amazon.com does not provide a guarantee on what is sold by third parties if the customer base understands the contrary. On page 10 of the judgment, it reads verbatim
You know, Amazon does everything in its power and goes above and beyond to make sure that we’re providing the best customer experience, including safe products.
Consequences for the digital ecosystem
Claims and communication are as binding as contracts
An immediate consequence of this ruling is that, from now on, companies will have to pay much attention to digital marketing strategies as not only contracts and ‘privacy policies’, but as in American detective stories also “anything they say can be used against them”.
A platform is not automatically an intermediary: this, as well as the other principles of liability law expressed by the American judgement, are substantially valid also in Italy, as are correct the criteria that have differentiated Amazon’s role from that of a simple intermediary.
Differentiating the responsibility of ISPs from that of OTTs
This judgment has the great merit of having drawn a clear line between the responsibilities of Internet Providers and OTTs, who do a different job and requires different regulations.
There have long been talks in Europe of the need to review the liability regime of electronic communications service providers, not least because of the need to curb the spread of illegal content. However, the rigidity of the e-commerce directive, now 20 years old and conceived in even older age, makes things difficult, because it no longer reflects the current ecosystem of the digital market. It would already be a great achievement if, thanks to this ruling, legislators and courts finally realised that ‘platform’ is not just a commercial or technical term but has a precise legal meaning in terms of assuming responsibility.
Class-action against platforms also in Italy?
Before sparkling enthusiasm about the possibility of replicating such action also on this side of the Atlantic, we must consider that the American decision has no value outside of California and that other States could decide differently, also based on specific national legislations. Furthermore, this is the first such decision, and therefore we will have to see whether other courts, in California or other states, will follow this course. Finally, it is not necessarily the case that in Italy the courts agree with their American colleagues, also if, again, the principles expressed in the Bolger judgment are also widely applicable in the European Union.
The Bolger judgment is an important precedent not only for the protection of the consumer in internet purchases but above all for the correct attribution of responsibilities in a sector in which for decades operators who did (and do) different jobs must comply with the same regulation. The responsibility of online intermediaries is an extremely complex issue. Challenging to regulate, it involves the rights of companies but also and above all those of individuals.
Regardless of the legal value of the decision outside the USA, or instead, California, hopefully, a similar approach will develop in Italy to stem the overwhelming power of Big Tech.