On July 3, a U.S. appeals court ruled that Amazon may be held liable for third-party products sold on its platform. The decision came from the 3rd U.S. City Court of Appeals in Philadelphia, and reverses the lower court ruling that had previously come out in Amazon’s favor.
The ruling states:
Amazon fails to account for the fact that under the Agreement, third-party vendors can communicate with the customers only through Amazon. 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.
If upheld, the ruling could completely change the way Amazon handles business. After all, third party sellers are responsible for 58 percent of Amazon’s total sales, raking in $11 billion in revenue during the previous quarter. But Amazon’s hands-off approach has ultimately enabled counterfeit and dangerous items to slip through the cracks and be sold to consumers.
Last year, a Tennessee family lost their home to an exploding hoverboard that they purchased from a third-party seller who neglected to disclose the product’s dangers. The one that got Amazon in the most trouble though was Heather Oberdorf’s dog leash—purchased from Marketplace seller, The Furry Gang—that snapped, leaving her permanently blind in one eye. After a district court found that Amazon couldn’t be sued over the leash, Oberdorf appealed the ruling, and the court largely found in her favor.
“It’s gratifying that the 3rd Circuit agreed with our argument and recognized that the existing interpretation of product liability law in Pennsylvania was not addressing the reality, the dominance that Amazon has in the marketplace,” Oberdorf’s lawyer told Reuters.
Amazon has not yet spoken on the matter, but it’s likely that they will appeal the ruling. Meanwhile, neither Oberdorf nor Amazon have been able to get in contact with The Furry Gang, but a lower court will determine whether or not the leash was, indeed, defective.