U.S. Agency Holds Amazon Responsible for Third-Party Products on Its Marketplace

Amazon Liability Investigation: Key Insights

• U.S. Agency Investigated Amazon's Responsibility: Due to issues with products sold through its online marketplace, the Consumer Product Safety Commission (CPSC) investigated whether Amazon should be responsible for harm incurred by third-party products on its platform.

• Decision and Order Against Amazon: The CPSC ruled that Amazon is the distributor of third-party products on amazon.com, which means it has the burden of recalling hazardous products and providing returns to consumers. Amazon has announced that it will appeal the decision.

A recent investigation by the U.S. Consumer Product Safety Commission (CPSC) into Amazon’s responsibility has come to a close. It resulted in a Decision and Order against the eCommerce leader, in which the U.S. agency unanimously determined that Amazon acts as a "distributor" of products sold through its marketplace, which means that Amazon is responsible for recalling defective products that may prove dangerous to consumers.

Amazon to Be Held Liable for 3P Products

The CPSC investigation comes amid a growing dispute over Amazon's responsibility for third-party (3P) products from its marketplace, some of which are handled by Amazon's in-house logistics service, Fulfilled by Amazon. The products in question cover more than 400,000 items, including defective carbon monoxide detectors, hair dryers without electrocution protection, and children’s sleepwear violating U.S. flammability standards. 

Due to the agency's ruling, Amazon will be required to develop plans for notifying consumers of items that pose a hazard and for returning or destroying them. In a second ruling, the CPSC will consider whether the proposed plans are sufficient.

Amazon Plans to Appeal

The dispute has been going on for years, with Amazon claiming that it does not act as a distributor and therefore is not liable for any harm caused by the products sold through its platform. The eCommerce giant had adjusted its practices to include “potential safety hazard” notices for certain products and offered in-house credits to customers who purchased questionable products. But the CPSC did not find these measures effective in warning consumers of product hazards and providing them with a refund to return or destroy the item. An administrative law judge upheld the agency's decision. 

Amazon representatives issued a company statement assuring that product quality is a primary concern: “We stand behind the safety of every product in our store through our A-to-z Guarantee, regardless of whether it is sold by Amazon or by one of our selling partners.”

Sources: BBC – CNN