Amazon can now be Held Legally Liable for Third-party Products Sold on Its Website

Amazon, the world’s top e-tailer, recently received some bad news about products sold on its uber-popular website.  The world’s largest e-commerce website was dealt quite the blow by a Federal Appeals Court that determined the e-tailer can be held legally liable for the defective items sold on its website.  This is somewhat of a controversial ruling as Amazon does not create those defective products nor make the decision to sell them on its platform.  Rather, it is third-party vendors who make or buy the problematic products and choose to sell them on Amazon’s platform.

About the Decision

The Federal Appeals Court decision referenced above was issued this past July.  The logic and motivation behind the ruling is to provide customers with much-needed protection against potentially harmful products sold on the popular Amazon online platform.  These protections will prove essential to consumer health while simultaneously ensuring the public can trust the items purchased on Amazon’s website.  Furthermore, the court’s ruling will help provide clarity when legal quandaries arise.  If the court had not ruled against Amazon, the company’s customers would have minimal, if any, avenue for legal recourse to obtain compensation that should be paid after injuries or other losses resulting from defective products sold by third-parties on Amazon’s platform.

Part of the reason why the above referenced ruling is so important is the fact that Amazon is an enormous entity.  The company is by far the top online e-tailer in the nation and the world.  This means the court’s decision will have an extensive impact both for Amazon and its customers.  All in all, Amazon is responsible for just under one-half of the country’s e-commerce market.  Amazon’s business accounts for about 5% of the United States’ entire retail market.  An astonishing 12 million products are sold on the e-tailer’s platform.  Nearly 100 million people are now members of Amazon Prime service that ensures the timely and affordable delivery of items purchased on Amazon’s website.

Liability for Third-party Vendors who Sell on Amazon

Though much of Amazon’s remarkable growth is attributable to third-party sellers who pedal their products on Amazon’s website, some of the company’s success stems from tech advances, the superior user experience design of its platform and other Amazon services.  As an example, Amazon has a video streaming service, the forementioned Amazon Prime program and other ancillary offerings to boot.

Let’s take a closer look at those who sell their products on the Amazon platform. Many of these businesses store their products in warehouses owned by Amazon, allowing the giant e-tailer to fulfill its orders or, in some cases, ship directly to customers.  Data recently reported by Statista reveals more than half of all Amazon’s sales stem from such third-party vendors.  All in all, revenue resulting from such third-party services accounted for an incredible $12 billion worth of revenue for Amazon in a single quarter of economic activity.  In other words, Amazon is quite dependent on third-party vendors.  Yet Amazon does not actually create the questionable products addressed in the court ruling above.

Some consumer advocates have questioned whether Amazon should be held liable for harm resulting from the products sold by third-party retailers on its web platform.  There is an argument to be made that Amazon should have to pay for some, if not all, of the cost of harm and other damages caused by the products sold on its platform.  It is quite interesting to note several courts including a couple courts on the federal appellate level, had ruled in Amazon’s favor until the decision described above was handed down.

Why the Ruling is Important

The latest ruling concerning Amazon liability reversed the decision of a lower court, making it the first to contrast with prior court decisions concerning harmful products sold on Amazon’s website.  The court’s latest ruling is partially the result of a ’16 lawsuit filed by a woman who insisted a dog leash she bought from a third-party merchant on Amazon malfunctioned, hit her in the face and blinded her.  The leash was shipped directly to the customer, straight from the third-party seller.  However, this merchant has not been active on the Amazon platform since ’16.  Amazon and the alleged victim supposedly attempted to contact the company yet neither has received any response.

The Federal Appeals Court judges ruled in favor of the plaintiff in the Amazon case noted above, 2 to 1.  The court’s majority opinion was penned by Circuit Judge Jane Richards Roth.  Roth wrote Amazon can be held legally liable for harm caused by third-party vendors as the e-tailer’s business model empowers vendors to hide their identity and contact information from consumers.  This concealment subjects customers to potential harm and also shuts the door on potential recourse in the event the product causes an injury.  The next step is for the case to be reviewed by a lower court to determine if the dog leash in the forementioned case is actually defective

Why the Decision on Amazon Product Liability is Meaningful

The ruling detailed above has significant ramifications for Amazon.  Amazon can now be held legally liable for damages stemming from defective products.  This means the e-tailer will now be on the hook for costs arising from defective products that cause pain, suffering, lost wages and medical expenses.  Though manufacturers are mainly liable for the damages and injuries endured by customers, the latest court ruling gives such victims another avenue of legal recourse, especially in situations that are particularly thorny in the context of the law.  The court ruling paves the way for wronged parties to obtain compensation for extensive damages including catastrophic injuries.  The ruling also provides an avenue of legal recourse for those wronged by defunct, unidentified or unresponsive merchants on the Amazon website.

Have You Been Wronged by Amazon or Another Business?  Legal Help is Available

If you have been harmed by a product purchased on the Amazon platform or anywhere else, you need and deserve top-notch legal representation.  The bottom line is you have every reason to believe the products you pay your hard-earned money for will be safe.  Amazon has no excuse to sell such defective or otherwise-harmful items on its website.  The legal team at Schibell & Mennie is here to represent you in your quest for justice.  If your injury, property damage or other loss is in any way related to negligence on behalf of Amazon or any other party, contact our law firm led by Richard Schibell right away.  We will make every effort possible to make you whole again.  Dial 732-774-1000 to schedule a no-cost consultation.

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