Is There Amazon Product Liability for Sales Through Third-Party Fulfillment Programs?
Several different parties may bear liability when a defective product results in personal injuries. These will typically involve the designer and manufacturer of the product, wholesale distributors, as well as retailers who directly sell the product. With “brick and mortar” retailers, it’s clear who is selling the product — we’ve actually walked through the doors of their local store, picked the product off a shelf, paid for the purchase, and taken the product home to use. However, with online market sites — especially the biggest online seller, Amazon — it can be much less obvious who the “seller” is from a legal perspective. That often results in the question, “Is there Amazon product liability for a defective product that was purchased through – but not necessarily ‘sold by’ — Amazon?” This question becomes more urgent when considering a recent complaint about flammable children’s pajamas sold through Amazon.
Amazon Has a Variety of Sales Programs
Complicating matters related to Amazon product liability is the fact that the company actually has several different sales models that it follows for the products being displayed on its website. The most obvious model is that in which Amazon is both the retailer selling the product and the product “fulfillment” provider — they are actually packaging and shipping products through their warehouses.
The second type of sales model is one where Amazon provides an online venue for other people and companies to sell their products — Amazon handles the online transaction, but the retailer of the product is a separate person or company who is the one stocking and shipping the items to customers.
Now Amazon has yet a third sales model — one called their “Fulfilled by Amazon” program — in which a third party is still the “seller” of the product, but where they’ve sent their product to an Amazon warehouse from which the sale is shipped and “fulfilled.”
What is the Current Amazon Product Liability Getting Attention?
In July 2021, the Consumer Product Safety Commission (CPSC), a federal agency responsible for product safety standards and recalls, filed an administrative complaint against Amazon related to products sold through its “Fulfilled by Amazon” program. The three products that are the specific matters in this complaint are tens of thousands of defective carbon monoxide detectors, hundreds of thousands of hair dryers that don’t have proper safeguards against electrocution, and children’s pajamas that aren’t up to flammability standards under the Flammable Fabrics Act.
Under this Fulfilled by Amazon program, the sellers send their products to an Amazon warehouse where they are stored — when a product is sold, Amazon staff pack and ship the item. The products, however, remain under the ownership of the merchant who is participating with Amazon. Is Amazon responsible for recalling these products? The CPSC complaint is saying, “Yes.”
Why is this Occurring?
Product liability laws generally hold that the seller of a product — along with designers, manufacturers, and distributors of a product — are liable for injuries that may occur due to defects in those products. Additionally, major retailers of defective products — again, along with the product manufacturers — have a responsibility under federal and state laws for issuing recalls and warnings about defective products and for issuing refunds or repairing defective products. Both these things cost money that Amazon would prefer not to spend. Amazon has argued that it is not liable for personal injuries from defective products and/or that it is not responsible for recalling, repairing, replacing, or refunding payments for defective products, for which Amazon is not the legal “seller.”
This situation has arisen in a number of cases where Amazon was only the online sales platform for third-party sellers who were handling their own product fulfillment. This new program is an intermediate situation where Amazon does handle the product but insists it remains legally the property of the third-party seller.
What Products are Covered?
According to the CPSC complaint, the current action covers approximately 382,000 hairdryers from about two dozen different manufacturers and sellers that were sold through Amazon between 2019 and 2021 for prices ranging from $20 to $70 apiece. The hairdryers don’t provide immersion (in water) protection from electrocution in compliance with Underwriters Laboratories standards.
The CPSC complaint also relates to some 24,632 carbon monoxide detectors manufactured by WJZXTEK, Zhenzhou Winsen Electronics Technology Company, LTD, and BQQZHZ and sold through Amazon between 2018 and 2020. The carbon monoxide detectors were tested by CPSC staff and simply don’t work.
The children’s sleepwear – which also failed to pass flammability testing by CPSC staff – include such garments as:
- Lace Cotton Nightgowns
- Long-Sleeve Sleep Shirts Princess Sleepwear for Toddlers
- Kids Animal Hooded Soft Flannel Bathrobes
- Plush Fleece and Hooded Kids Bathrobe
- Coral Fleece Bathrobe and Pajamas
Further details on the products are contained in the CPSC complaint.
Watch a YouTube video describing how Amazon may be held liable for products sold through its marketplace:
Sacramento Products Liability Attorneys
I’m Ed Smith, a Sacramento Products Liability Attorney. Any product defect is a matter to be concerned about, but hair dryers that don’t meet anti-electrocution standards, carbon monoxide detectors that just don’t work, and children’s sleepwear that may present burning hazards to our children all rise to a much higher level of concern whether they are sold through a brick-and-mortar store or through an online retailer like Amazon. If you or a family member has been injured by a defective product – including one sold through Amazon — please call us at (916) 921-6400 or (800) 404-5400 for free and friendly case advice or you can reach us through our online contact form.
I am pleased to be a member of the Million Dollar Advocates Forum, as well as the National Association of Distinguished Counsel.
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