Third-party online marketplaces liable for defective products

On Behalf of | Aug 18, 2020 | Personal Injury

Amazon stands as one of the top five technology companies in the world. Even with its massive valuation, the corporation could not win one particular suit in court. An appeals court in California decreed that Amazon may be liable for defective products sold by third-party vendors. Amazon might disagree with the decision, but the company must abide by the ruling. Expect further lawsuits against Amazon to follow as keeping defective products off of its expansive inventory list may not be possible.

The recent appellate court decision holds Amazon liable for an exploding laptop battery that burned a plaintiff. Rather than manufacturing the batteries, Amazon is an online marketplace that works with third-party sellers; in this case, the seller signed onto Amazon’s “fulfilled by Amazon” program. With this deal, third-party sellers ship products to Amazon warehouses. Amazon then ships the items after someone makes a purchase. This way, the products arrive faster.

In the case, Amazon sought to shield itself from liability claims through the Communications Decency Act of 1996. The appellate court ruled that the legislation did not apply.

Amazon contended that it has nothing to do with product quality because the online retailer is not the “true” seller, nor does it manufacturer anything. Instead, Amazon serves as a marketplace. The court, however, felt that Amazon’s role proves more active than passive. Since Amazon charges the seller fees for storage and shipping, Amazon becomes more materially responsible for the delivered product. Per the court’s logic, Amazon must take responsibility for defective products.

Amazon may choose to take the ruling to the Supreme Court. Time will reveal if the Supreme Court decides to hear the case, and the possibility exists that a decision could work against Amazon’s favor.

Defective products fall under personal injury law delineations. Personal injury attorneys might find themselves handling more online marketplace lawsuits after this ruling.