Shopify COO speaks out against Amazon-backed consumer protection bill in California

Consumer protection"cannot come at the expense of independent businesses who are frankly the backbone of our economy," Shopify COO Harley Finkelstein said. Subscribe to CNBC PRO for access to investor and analyst insights: https://cnb.cx/2Vtntx6

A Shopify executive is the latest e-commerce operation to come out against a consumer protection bill that has received the backing of Amazon, telling CNBC it would stifle small businesses that operate online.

“We unequivocally believe that for the future of commerce to survive and thrive it has to be in the hands of the many, not the few,” Shopify COO Harley Finkelstein said in a “Mad Money” interview with Jim Cramer Wednesday.

Consumer protection is very important “but it cannot come at the expense of independent businesses who are frankly the backbone of our economy,” he said, joining Etsy, eBay’s public policy team and other industry groups in opposition to the proposal.

The measure, Assembly Bill 3262, being considered by state lawmakers would subject “electronic retail marketplaces” to product liability requirements as brick-and-mortar retailers. If passed into law, California would be the first state to make online marketplaces be responsible for defective goods listed on their websites.

While Shopify is not itself a marketplace, but provides tools for businesses to open an internet storefront, “we still believe that the world is better with many entrepreneurs and many independent entrepreneurs, and anything that makes it more difficult we don’t is a great thing,” Finkelstein said.

AB 3262 was amended on Monday to add internet markets that make money on what merchants bring in from advertising. The changes were made after Amazon’s public policy arm said it would back the measure under such conditions.

“Injured consumers should be able to seek compensation regardless of how a particular online marketplace makes money,” Brian Huseman, the company’s policy chief, wrote in a blog post on Friday. The position follows a court ruling earlier this month that said Amazon could be liable for damages from a defective product that was sold on the platform by a merchant and burned a customer.

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