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Others have called for Amazon to be held financially and legally liable for any harm brought on by third-party products sold on its website in recent years due to concerns about the safety of products sold there. Yet, Amazon has always argued that it should not be held liable for the security of goods sold by third parties because it is only a platform that connects buyers and sellers.
This position has been called into question by a recent decision by three justices on the Los Angeles state court of appeal. The judges decided that under California’s strict liability doctrine, Amazon constituted a direct link in the vertical chain of distribution in the instance of a California citizen who purchased a hoverboard from a Chinese manufacturer via Amazon in 2015. They disproved Amazon’s assertion that its website is just a platform and held the business responsible for the goods that it permits other companies to sell on its website.
The decision is noteworthy since third-party merchants account for more than half of all Amazon’s products. Due to the court’s ruling, Amazon is now responsible for ensuring that the goods offered by its global merchants are safe. This verdict contributes to the company’s retail supremacy. The ruling also has important ramifications for other online merchants, who can no longer argue that they are only intermediaries between buyers and sellers and are not in charge of the security of the goods they offer.
The case involves a hoverboard that Oroville, California, resident Kisha Loomis bought for her son for Christmas. Loomis was “severely burned,” her home was damaged, and the hoverboard “exploded while charging in a bedroom” less than a week after the holiday. Due to the failure of the Chinese manufacturer and its American distributor, Amazon was responsible for the harm and losses.
In the initial instance, Amazon had won thanks to an L.A. The judge agreed it was only an “online advertisement” and not accountable for the goods it sells from third parties. The appellate court decision this week overturned that decision and made Amazon responsible for the goods it permits outside vendors to sell on its marketplace.
The appellate justices rejected Amazon’s argument that it was merely a platform connecting buyers and sellers, holding that the company was a key part of the transaction and could be held liable if a product turned out to be harmful. They cited Amazon’s “substantial ability to influence the manufacturing or distribution process through its ability to require safety certification, indemnification, and insurance before it agrees to list any product.”
The ruling has important ramifications for Amazon and other online merchants, who can no longer assert that they are not accountable for the product safety of those offered on their websites. Amazon is already updating its policies for third-party sellers, and other merchants will probably do the same. The judgment also benefits customers because they can now hold internet retailers accountable for selling dangerous goods. This decision is a great move for anyone worried about the security of online products because product safety is a major topic.