Recourse for Defects and Deception: A Multifactor Duty Test for Online Platforms

Abstract

The law of torts has struggled with the issue of duty – both the creation of new duties and the creation of rules limiting the scope of liability. In an earlier article, one of us described the tension as one between a “violin” and a “cleaver.” With the violin representing multi-factored tests that provide particularized justice, while the cleaver represents sharp-edged rules that cut off such liability. Nowhere is this tension more apparent than in the case of online retail platforms. Some are at the center of the transaction. Others, not so much. We will explore the landscape, and suggest that sometimes, neither a violin, nor a cleaver is appropriate. What is required is a scalpel, what we will describe as a multi-factor duty approach, where the limits of liability are themselves the subject of a multi-factor test. We will explore this question with regard to Amazon, but the issues raised are broader in scope.

We start by reviewing our prior work that  articulates the basic principles of accountability that should, other things being equal, govern the relationship between retail consumers and internet platforms. We consider Amazon’s business model and argue that in the context of retail sales, internet platforms like Amazon should have responsibility for two aspects of the transaction: (1) assuring recourse; and (2) ensuring the accuracy of information provided to consumers (both about recourse and about the products sold). Having considered Amazon, we ask: to what extent should liability apply to other consumer internet platforms? Having established recourse and informational transparency as the cardinal duties of an internet platform, we explore how to decide whether these duties should attach, and where, doctrinally, the gatekeeping should be situated. Specifically, we consider whether these principles should be incorporated into a limited no-duty rule, or whether the duties should be fleshed out through the ordinary processes of the common law. We conclude with a multi-factor test under which a platform’s tort duties are triggered by the extent of its control over the transaction. Those duties should include, at a minimum, taking reasonable steps to assure informational accuracy, and to assure recourse in cases where the third-party seller is either unavailable or judgment-proof.