Amazon Responsible for Hazardous Products in Landmark Consumer Safety Decision

Reg Reinoso

Author

The recent decision by the U.S. Consumer Product Safety Commission (CPSC) to hold Amazon responsible for hazardous products sold by third-party sellers highlights an important issue in consumer protection and product liability law. While Amazon argued that it was not a “distributor” under federal law, the CPSC determined otherwise, determining it was responsible for hazardous products sold by third party sellers and ordering the company to notify customers and take steps to remove dangerous products from homes. This case underscores a broader legal principle: retail sellers, whether operating online or in physical stores, have a responsibility to ensure the safety of the products they sell, even those sold by third-party vendors.

In the unanimous decision, the CPSC held Amazon accountable as a “distributor” under the Consumer Product Safety Act (CPSA) for defective products sold by third-party sellers on its platform. The ruling came after more than 400,000 hazardous products were found, including faulty carbon monoxide detectors, hair dryers without electrocution protection, and children’s sleepwear that violated federal flammability standards. These are not minor issues, as defective products like these can mean the difference between life and death for innocent people. 

Amazon’s Legal Responsibility as a Distributor

The CPSC determined that Amazon’s Fulfilled by Amazon program, which provides various services to third-party sellers, classifies the company as a distributor with legal responsibilities for product safety. By facilitating the sale, storage, and delivery of these products, Amazon was deemed responsible for ensuring their compliance with safety standards, including notifying consumers and removing dangerous items from the marketplace.

Retailers have a legal duty of care to protect consumers by ensuring the products they sell are safe. This duty requires sellers to take reasonable steps to prevent harm, which includes verifying that the products they offer comply with safety regulations and standards. 

By providing a marketplace, facilitating transactions, and handling distribution, platforms like Amazon play a key role in the sale process and cannot simply disclaim liability. Retailers, both online and physical, must ensure that all products sold through their stores meet safety standards, regardless of whether they are directly responsible for manufacturing or are acting as intermediaries for third parties.

The Role of Recalls and Remediation Plans for Defective Products

Product recalls play a critical role in protecting consumers from defective products that pose safety risks. Regarding remediation for defective products, Amazon initially claimed that sending messages to initial purchasers about “potential” safety issues and providing store credits (not refunds) were sufficient to remedy the hazards. However, both the CPSC and an Administrative Law Judge (ALJ) found this response inadequate to protect the consumers and the greater public. 

As a result, Amazon has been ordered to submit plans that include more effective remedies, such as providing refunds or replacements and incentivizing the return or destruction of the defective products. Further, Amazon should also notify the public, so that not only initial purchasers but also those who may have received the products as gifts or bought them second-hand are aware of the risks. The CPSC will review these plans before issuing a second order detailing how Amazon must implement the necessary notifications and remedies.

This information is for informational purposes only and is not a substitute for legal advice.