CPSC Rules Amazon Must Recall Dangerous Items Sold By 3rd Party FBA Sellers
The U.S. Consumer Product Safety Commission has issued a ruling determining that Amazon was a “distributor” of products that are defective or fail to meet federal consumer product safety standards, and therefore legal responsible for the recall of these dangerous items.
The CPSC says Amazon failed to adequately notify the public about more than 400,000 recalled products sold between 2018-2021; specifically, faulty carbon monoxide (CO) detectors, hairdryers without electrocution protection, and children’s sleepwear that violated federal flammability standards.
The Commission determined that these products, listed on Amazon.com and sold by third-party sellers using the Fulfilled by Amazon program, pose a “substantial product hazard” under the Consumer Product Safety Act (CPSA). Further, Amazon failed to notify the public about these hazardous products and did not take adequate steps to encourage its customers to return or destroy them, thereby leaving consumers at substantial risk of injury.
Under the Commission’s order, Amazon must submit proposed plans to notify consumers and the public about the hazardous products, and to remove the products from commerce by incentivizing their return or destruction.
Amazon has indicated to multiple news outlets that it plans to appeal the decision, claiming the messages they sent to initial purchasers about “potential” safety issues and Amazon.com credits that were provided to those initial purchasers were sufficient to remedy the product hazards.
The decision comes as ecommerce marketplaces are coming under increasing regulatory and legislative scrutiny seeking to hold them more accountable for sellers and transactions on their sites.
For example, with the passage of the INFORM Consumers Act last year, marketplaces must now verify certain information about high-volume sellers and provide more transparency to consumers about who they are transacting with on these platforms.
Amazon is an easier target for regulators as their various fullment and vendor programs more directly involve the company in many of the sales on the site.
In contrast, competitors like eBay have long taken the position they are "just a venue", arguing in the ongoing EPA lawsuit regarding sales of chemicals, pesticides and emissions-control defeat devices on the site that Section 230 of the Communications Decency Act protects them from liability since they are a "pure peer to peer third party marketplace" and "eBay is never the seller."
Liz Morton
That argument may not protect eBay from the potential $2 Billion in fines in the EPA case, especially now that FTC has been petitioned to investigate eBay for anticompetitive mergers, deceptive practices & unfair methods of competition, citing (among other things) the fact that eBay has been selling trading cards on their own site under owned-subsidiary TCGPlayer name with no disclosure to consumers or third party sellers they are competing against.
Liz Morton
Do you think marketplaces like Amazon and eBay should be held liable for defective or dangerous items sold on their platforms? Let us know in the comments below!
