Etsy Claims Amazon Is Backing California Bill To Edge Out Competition

Amazon is facing criticism from Etsy CEO Josh Silverman over its support of a new California law. Silverman claimed that Amazon is “taking bold steps to wipe out its competitors” by backing the legislation, according to a Medium post.

“Amazon’s goal is to be the only place to buy stuff online, hobbling mom-and-pops that sell unique items in their own shops, or more frequently since COVID, through marketplaces like Etsy,” Silverman said, per the post. “Small businesses, struggling now more than ever, will ultimately bear the brunt of the overbearing burdens of AB 3262.”

Amazon took a different approach than its peer as it put conditional support behind the legislation called AB 3262 that aims to have “electronic retail marketplaces” follow the same liability standards that physical retailers face, CNBC reported.

Brian Huseman, Amazon’s public policy chief, wrote in a blog post that the eCommerce firm would be in favor of AB 3262 if it encompassed “all online marketplaces regardless of their particular business models” on Friday (Aug. 21).

“Injured consumers should be able to seek compensation regardless of how a particular online marketplace makes money,” Huseman said in the post.

It is anticipated that the state senate in California will vote on the measure this week, following the California assembly providing the green light for it. Legislators had updated the bill on Monday to encompass digital marketplaces that financially benefit from ad fees that merchants take in, CNBC reported.

The news comes as Etsy reported large second quarter gains on Aug. 5 in its overall number of purchasers, merchants and gross merchandise sales as the pandemic brought shoppers to its platform to buy face masks and other items.

The online shopping website, which showcases art, furniture and attire, among other items, experienced double- and triple-digit percentage increases in the quarter in multiple important areas.

Etsy’s consolidated gross merchandise sales increased 146 percent, and gross merchandise sales for its marketplace increased 93 percent with the exclusion of face mask sales. Also, consolidated active buyers on the platform increased 41 percent year over year.