Court Tells Amazon it is Liable for Third-Party Product Faults

Court Tells Amazon it is Liable for Third-Party Product Faults

A Californian court has told Amazon that it is liable for third-party product faults, adding that the e-commerce giant is responsible for ensuring the safety of products sold via a third party. 

The ruling came from the Court of Appeal Justices in Los Angeles, who said that Amazon was a vital link in the sales chain, and therefore responsible for ensuring the products it sells on its platform are safe. 

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To ensure that customers are protected, the Californian court told Amazon that it was not legally or financially protected from safety flaws in its products, and is not able to distance itself as merely a retailer of those potentially unsafe products. 

Instead, the court ruled that Amazon is a “direct link” in the chain of distribution under California’s liability laws, and says that Amazon should act accordingly. 

“We are persuaded that Amazon’s own business practices make it a direct link in the vertical chain of distribution under California’s strict liability doctrine,” the court told Amazon. 

Amazon had argued that its role as a connection between buyers and sellers with their platform excuses it from being liable for unsafe products being sold on the site. The court rejected this, stating instead that Amazon is perhaps the most ‘key’ part of the transaction overall, and as a result, cannot be deemed an innocent party if an unsafe product is sold via Amazon’s store. 

“Amazon is the retailer. They’re the one selling the product,” says Christopher Dolan, a San Francisco-based lawyer that is heading the case against Amazon in the Californian court. 

Court Tells Amazon it is Liable for Third-Party Product Faults

“Because of this ruling, you can be sure Amazon is rewriting all its rules for third-party sellers, and it’s doing it today,” he said. 

The ruling was issued after a case was dismissed in March, 2019 that centered on a number of electronic skateboards sold on Amazon’s platform that were vulnerable to exploding batteries. 

In that case, the Los Angeles judge ruled in favour of Amazon’s position that it was acting as an “online advertiser,” and was not liable for any third party product faults, or unsafe products sold on its platform.

The most recent ruling overturned the 2019 ruling, with the judge siding with consumers and stating that Amazon is, in fact, liable for any third party product faults or unsafe products sold on its store. 

The judge pointed out that Amazon’s “substantial ability to influence the manufacturing or distribution process through its ability to require safety certification, indemnification and insurance before it agrees to list any product.”

An Amazon spokesperson has responded to the report from the Los Angeles Times stating that “Amazon invests heavily in the safety and authenticity of all products offered in our store, including proactively vetting sellers and products before being listed, and continuously monitoring our store for signals of a concern.” 

A report from Engaget states that “the decision, if it holds, could force Amazon to change policies.” 

“The tech giant may have to step up its vetting process for sellers and be ready to accept liability for safety problems, including lawsuits. Other stores with similar third-party marketplaces would have to follow suit.” 

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