Earlier quoted context omitted.
It is a defense. Even in a court of law not knowing about something can potentially protect you from punishment. It is just a part of the nature of outsourcing. Your supplier might just choose to outsource himself and have the work done by companies you couldn't possibly work with. For a digital good this is extremely hard to monitor. How would a Californian studio possibly know what company their supplier outsources…
Don’t outsource. If you outsource, have boots on the ground ensuring working conditions and no re outsourcing. Pick one. Pretty straightforward.
If this were codified into law I would suspect that it would quickly lead to monopolization. I can't imagine how the world would work without contractors. Imagine if Apple had to operate the mines, build the machines to mine the materials, to build the machines to build those machines, build the silicon foundry, and all the things along from dirt in the ground to the iPhone. Boy, you'd get nothing done. Because that's the world with no "outsourcing." It is too broad of a word.