The US Consumer Product Safety Commission (CPSC) has taken a significant step in holding Amazon accountable for unsafe products sold on its platform.
In a unanimous vote, the agency declared Amazon responsible for faulty or dangerous items offered by third-party sellers through its website and app.
This decision stems from the CPSC’s identification of over 400,000 defective products sold via Amazon. The online retail giant must now recall these items or face legal repercussions. The ruling covers a range of hazardous goods, including:
- Carbon monoxide detectors that fail to sound alarms
- Children’s pajamas with fire hazards
- Hair dryers posing electrocution risks if submerged in water
The CPSC’s stance highlights a crucial aspect of Amazon’s business model. As of January, more than 60% of sales in Amazon’s stores come from independent sellers. This structure has led to ongoing legal debates about liability for faulty products.
An administrative law judge sided with the CPSC, determining that Amazon functions as a distributor for third-party goods. The judge dismissed Amazon’s argument that it doesn’t fit the definition of a distributor under the Consumer Product Safety Act.
The CPSC criticized Amazon’s approach to addressing safety concerns:
“Amazon failed to notify the public about these hazardous products and did not take adequate steps to encourage its customers to return or destroy them, thereby leaving consumers at substantial risk of injury,” the agency stated.
The commission found Amazon’s practice of sending messages about “potential” safety issues insufficient. Additionally, offering Amazon credit instead of refunds was deemed inadequate for encouraging returns or destruction of dangerous items.
This ruling marks a significant development in the CPSC’s efforts to regulate large online marketplaces. In 2021, former Acting Chairman Robert Adler described the initial lawsuit against Amazon as “a huge step forward for this small agency.”
He added, “But it’s a huge step across a vast desert — we must grapple with how to deal with these massive third-party platforms more efficiently, and how best to protect the American consumers who rely on them.”
Moving forward, Amazon must develop and submit plans to:
- Notify purchasers and the public about product hazards
- Provide refunds or replacements for affected products
- Remove dangerous items from its online marketplace
This decision reflects the CPSC’s increased focus on product safety under the Biden administration. It also highlights the challenges regulators face in overseeing the vast ecosystem of online marketplaces and third-party sellers.
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As e-commerce continues to grow, this ruling could set a precedent for how other online platforms are held accountable for the products sold through their services.