Amazon Found Liable for Defective Goods Sold by Third-Party Merchants
TapTechNews August 1st news, according to CNBC, the US federal regulatory agency determined that Amazon is liable for the defective goods sold by third-party merchants on its online marketplace, rejecting the company's stance that it is only a middleman between consumers and sellers.
On Tuesday local time, the US Consumer Product Safety Commission said that the agency unanimously agreed that Amazon fully complies with the definition of a product distributor and is therefore legally liable for its recall .
As part of the agency's decision, Amazon needs to develop a plan to inform purchasers and the public about product hazards and provide refund or replacement services for affected products.
Currently, Amazon's marketplace hosts millions of third-party sellers, accounting for about 60% of the company's e-commerce sales. Although this marketplace has helped Amazon generate record revenues, it has also proven to have counterfeit, unsafe, and even expired goods. The company has previously stated that it invests hundreds of millions of dollars annually to ensure the safety and compliance of products sold.
TapTechNews note: In many previous lawsuits, Amazon has insisted that it is only a broker between the buyer and the seller, and does not participate in the procurement or distribution of products sold by third-party sellers, and therefore should not be liable.
In 2021, the Consumer Product Safety Commission sued Amazon to force it to recall hundreds of thousands of products considered dangerous. The issues involved 418,818 items sold through Amazon, including defective carbon monoxide detectors, hair dryers without electrical protection, and children's pajamas with a burn risk. However, Amazon argued in response to the agency's complaint that it should be classified as a third-party logistics provider because it only receives and transports products sold through its website.
An Amazon spokesperson said in a statement that the company is disappointed with the Consumer Product Safety Commission's decision and plans to appeal. They added that Amazon is responsible for the safety of every product in its store, whether it is a product sold by the company or by a third-party seller.