Amazon can be liable for faulty and unsafe products, says new US court ruling

A recent court ruling in the US could be about to make it harder for the online marketplace giant, Amazon, to avoid responsibility for unsafe goods sold on its platform. It deals a major blow to the business that has successfully fought-off lawsuits trying to place liability on the company for faulty and unsafe products for years.

The ruling arrived last week when the California Fourth District Court of Appeals stated that Amazon can be held liable for damages caused by a defective replacement laptop battery that caught fire and gave a women third-degree burns. The woman, Angela Bolger, alleges that she bought the laptop from a third-party seller, Lenoge Technology HK on Amazon.

Amazon has said that it will appeal the decision, telling CNBC in a statement that ‘the court’s decision was wrongly decided and is contrary to the well-established law in California and around the country that service providers are not liable for third-party products they do not make or sell.’

It’s a line that Amazon has long held much to the frustration of the toy and games industry, which itself has been impacted by the ease at which unsafe, untested, and uncertified products have made it to the marketplace and into the hands of consumers in recent years. The issue around unsafe products and those non-compliant with stringent safety testing laws sold on the platform has been a major point of action for both the BTHA and TIE in tackling.

Amazon’s marketplace hosts millions of third-party sellers and now accounts for approximately 60 per cent of the company’s e-commerce sales. While the marketplace has helped Amazon bring in record revenue, it has also proven to host unsafe, counterfeit, or even expired goods.

The company has previously said it invests hundreds of millions of dollars per year to ensure products sold are safe and compliant, but it still faces several ongoing product liability cases across the US.

As reported by CNBC, it is in Bolger’s case that the court ruled Amazon placed itself in “the chain of distribution” of the faulty laptop battery by, among other things, storing the product in its warehouses, receiving payment and shipping the product, as well as setting “the terms of its relationship” with the third-party seller and demanding “substantial fees on each purchase.”

“Whatever term we use to describe Amazon’s role, be it ‘retailer,’ ‘distributor,’ or merely ‘facilitator,’ it was pivotal in bringing the product here to the consumer,” the court said. “Under established principles of strict liability, Amazon should be held liable if a product sold through its website turns out to be defective.”

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