Syed Imran Haider 
Federal regulators will hold Amazon responsible if third-party sellers sell defective products on its platform.
This comes after the company claimed that it merely functions as an intermediary between sellers and consumers.
The Order
On Tuesday, the US Consumer Product Safety Commission issued a landmark order. The agency said that they had agreed unanimously that Amazon meets the definition of a distributor of goods.
Therefore, their recall is the legal responsibility of the company. The decision of the agency requires Amazon to develop a plan for informing the public and buyers about the product hazards.
It would also have to offer replacements and refunds to customers for the affected products. There are millions of third-party sellers using Amazon’s marketplace.
The platform accounts for about 60% of the e-commerce sales of the company. Amazon has undoubtedly earned record revenue, thanks to the marketplace.
However, the marketplace also advertises unsafe, counterfeit and even expired products. Previously, the company said that millions of dollars have been invested to ensure that compliant and products are sold on the platform.
The decision of the federal regulator has addressed an issue that has been a hot topic of debate for years.
Amazon’s Stance
There have been numerous lawsuits and Amazon has continued to maintain the same stance in all. It claims that it is just a conduit between sellers and buyers on its marketplace.
It does not distribute or source the products that third-party sellers offer, which means it has no liability. Amazon has used this defense successfully in the past.
This included a case in 2018 that happened due to a faulty hoverboard. The product had exploded and caused the house of the shopper to burn down in Tennessee.
There have also been cases where legislators and federal regulators have asserted that the company needs to be held liable.
The Lawsuits
The CPSC had filed a lawsuit against the e-commerce giant in 2021. Regulators and advocates aimed to force Amazon to take action and recall hundreds of thousands of dangerous products.
There were a total of 418,818 products that were at the center of the issue. They had been sold via the marketplace.
These included children’s sleepwear susceptible to burns, hairdryers without electrocution protection and faulty carbon monoxide detectors.
In response to the complaint of the agency, Amazon said that it is a third-party logistics provider. This means that it only receives and transports the products sold via its site.
The CSPC (Consumer Safety Product Commission) flags hazardous products and takes action to remove them from the market, prompting the marketplace to remove the products and prohibit merchants from selling them.
The company informed shoppers who had bought the items about ‘potential safety issues’, told them to destroy the products, and gave them credits.
The CPSC said that the company’s actions were not enough.The commission ordered Amazon to offer refunds to customers to return or destroy a product.
An administrative law judge has rejected Amazon’s argument. According to the judge, Amazon keeps sellers’ inventory in its warehouses under its Fulfilled by Amazon service.
Therefore, it has a great degree of control over the products sold via its platform, which means it is not just a third-party logistics provider.
