Amazon is Now Liable for Third Party Sellers' Products

11:20 07/04/2019

A Federal Appeals Court has just found that Amazon AMZN  is liable for third party sellers' products.

For many Amazon customers this is a celebratory occasion considering that some products have greatfully harmed some users.

It was on Wednesday that a Pennsylvania Federal appeals court ruled that Amazon is to be liable for third party sellers' defective products on its platform.

The court had appealed a lower court ruling to make Amazon liable for these faulty or counterfeit products.

Amazon has been met with backlash over the years for allowing vendors to sell faulty and counterfeit items on its site. Defective products include a hoverboard that exploded and burned down a family's house and a dog leash that blinded a woman.

Pennsylvania customer, Heather Oberdorf, who purchased a retractable dog leash on from a third-party vendor, The Furry Gang, was blinded by the product. While walking her dog in 2015, Oberdorf was blinded after the leash suddenly recoiled. Amazon nor Oberdorf has been able to contact the Furry Gang.

While the company had previously escaped liability for its vendors’ products in other court rulings, Amazon didn't win today.

“Amazon fails to account for the fact that under the Agreement, third-party vendors can communicate with the customers only through Amazon,” said the latest ruling. “This enables third-party vendors to conceal themselves from the customer, leaving customers injured by defective products with no direct recourse to the third-party vendor.”

In a recent letter to shareholders, CEO Jeff Bezos wrote, 'Something strange and remarkable has happened over the last 20 years,” Amazon’s Jeff Bezos said in his annual letter to shareholders. “Third-party sales have grown from 3% of the total to 58%. To put it bluntly: Third-party sellers are kicking our first-party butt.'

In 1999, Amazon did $1.6 billion in physical gross merchandise sales itself, compared to $100 million by its third-party sellers. Last year, Amazon’s direct sales were $117 billion and third-party sales, mostly from small- and medium-sized businesses, came in at $160 billion.


This article has been provided by a Chasing Markets contributor. All content submitted by this author represent their personal opinions, and should be considered as such for entertainment purpose only. All opinions expressed are those of the writer, and may not necessarily represent fact, opinions, or bias of Chasing Markets.
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