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Businesses The Courts

Amazon Can Be Held Liable For Third-Party Seller Products, Court Says (reuters.com) 136

Posted by BeauHD from the finger-pointing dept.
A federal appeals court on Wednesday ruled that Amazon can be held liable for third-party seller products, exposing the online retailer to lawsuits from customers who buy defective products through its website. Reuters reports: Numerous other courts, including two federal appeals courts, have held that Amazon cannot be held liable as a seller of products from third-party vendors. The new ruling from the 3rd U.S. Circuit Court of Appeals in Philadelphia, which reversed a lower court decision, appeared to be the first to buck that trend. Liability for defective products is generally governed by state law, and Wednesday's decision is based on the laws of Pennsylvania, where the customer, Heather Oberdorf, lives.

Oberdorf sued Amazon in 2016 in a federal court in Pennsylvania, saying she was blinded in one eye when a retractable dog leash she bought through the company's website from a third-party vendor snapped and recoiled, hitting her in the face. The Furry Gang shipped the leash directly to Oberdorf from Nevada. Neither Oberdorf nor Amazon has been able to locate any representative of the Furry Gang, which has not been active on Amazon's site since 2016, according to court papers. In Wednesday's opinion, Circuit Judge Jane Richards Roth, writing for a 2-1 majority of a three-judge panel, said Amazon may be liable in part because its business model "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."
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Amazon Can Be Held Liable For Third-Party Seller Products, Court Says More

Amazon Can Be Held Liable For Third-Party Seller Products, Court Says

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  • I think this is probably good (Score:5, Interesting)

    by SuperKendall ( 25149 ) on Wednesday July 03, 2019 @08:49PM (#58870348)

    Amazon has for too long profited from many counterfeit goods sold there, or almost even worse truly questionable quality things like chargers that actually can damage devices.

    If this makes Amazon takes a much more careful look at sellers I think it can only be for the good, as an economic incentive to do due diligence, in a way they obviously have not been willing to do to date.

    It may make for some more expensive products but that is probably marginal, compared to more people feeling like they can order electronics from Amazon and not get (literally) burned.

    • Re:I think this is probably good (Score:5, Insightful)

      by blindseer ( 891256 ) <blindseer@eartBO ... minus physicist> on Wednesday July 03, 2019 @09:31PM (#58870490)

      Why moderate this down?

      Amazon has for too long profited from many counterfeit goods sold there, or almost even worse truly questionable quality things like chargers that actually can damage devices.

      If this makes Amazon takes a much more careful look at sellers I think it can only be for the good, as an economic incentive to do due diligence, in a way they obviously have not been willing to do to date.

      It may make for some more expensive products but that is probably marginal, compared to more people feeling like they can order electronics from Amazon and not get (literally) burned.

      If Amazon wants to become another junk dealer on the internet then they need to make that clear up front. Their business model is based on trust and if they fail to maintain this trust then they can start to find customers drifting away.

      I used to really like Amazon, I could trust them to sell quality items. I found myself taking an ever increasing care on where my items come from on Amazon. It got to a point that I'm buying fewer items from them. I prefer instead to go to websites for brick and mortar stores in my area because if something goes wrong then I can go to a store and grab someone's collar if I must. Amazon has been getting increasingly fast and convenient but it's real hard to compete with a local store that I can place my order online with a local store, they hold the item until I get there, and then while I'm there I can pick up whatever it was I forgot to order in the first place. I might have to visit a half dozen websites to make all my purchases but once I find everything I need I can make a quick trip around town to pick up everything and I saved hours in shopping and travel and I didn't have to wait for even overnight shipping. If there wasn't something in stock that day then I can still get it from those same trusted locations, have them hold it at the store (which is always free) or shipped to my home (sometimes free, sometimes a small fee). I'm likely paying more but I don't make enough money to buy cheap shit twice.

      Amazon might be huge right now but we've seen the mighty fall before. If they can't maintain quality of products they offer, and stand up for their customers, then I'll continue to drift away from them.

      • Re: (Score:2)

        by Xenx ( 2211586 )
        Do you realize that the only way Amazon can ensure product fitness, before a 3rd party sells it, would be for all the items to be shipped to Amazon and individually tested and then shipped out from there? Realistically, that cannot be done.

        Amazon only has two viable options. The first option is the one they currently do. Remove fraudulent 3rd party sellers when they get reported. Grain of salt and all, given that people will lie and cheat. So, they might come back under a different name. I don't know how

        • Re:I think this is probably good (Score:5, Insightful)

          by bytestorm ( 1296659 ) on Thursday July 04, 2019 @11:13AM (#58872856)

          Sounds like a cost of doing business problem that all of the b&m stores have already handled. There are entire professions built around selection and supply chain management of products for sale in stores. Amazon shouldn't get special consideration for being an online marketplace. Right now, they're a bazaar masquerading as a store and that needs better separation.

          • Re: (Score:2)

            by Xenx ( 2211586 )
            Your post just basically reiterates what I said in my post about one solution being to drop 3rd party sellers and go with trusted sources, like a B&M.
        • Comment removed based on user account deletion

          • Re: (Score:2)

            by Xenx ( 2211586 )

            Third parties don't sell it. When my CC is billed, it is billed by AMAZON.

            So you're saying the company billing my CC is the company that sold me the product? So, everything I buy through Paypal is sold to me by Paypal?

            Amazon does not promote the fact that many sales are handled by third parties.

            I see tons of crap every time I go to Amazon about which store is selling the item, what store is selling at what price, and the like. They're not hiding it. When looking at which sellers are available for the items, it also shows the seller rating. Clearly, you must not use Amazon.

      • A few months ago, I bought a Samsung branded USB flash drive from Amazon. The seller was listed as 'SAMSUNG' and it was prime eligible. When I got the USB drive, rather than the 128GB markings on the drive, it was 4GB. A quick Google revealed that others have been burned by the same counterfeiting issue.

        To their credit, Amazon refunded it immediately and I sent the drive back but they clearly have counterfeit goods in their marketplace

      • This is perhaps the biggest issue in my book is that many things are not clear. I'd venture to say that Amazon obscures things on purpose.

        I rarely buy anything from Amazon that isn't 'ships and fulfilled' by Amazon. If I do, it better be 5 stars with no complaints.

        For one thing, if you search for an item, there isn't an 'obvious' way to restrict it to ships and fulfilled by Amazon. You have to click on item and look at the details.

        Then if you do buy items from a 3rd party, Amazon makes it as obscure as poss

    • Amazon's marketplace is a volume based business. Their volume benefits from permitting fraudulent, defective, and especially counterfeit products that form such a large percentage of different online vendors, including Amazon, Ebay, and Craigslist. Accepting responsibility for authenticating vendors, and ensuring that they are traceable by law enforcement, by the manufactures of non-counterfeited, or by abused clients would cost resources, cost time, leave them at risk for failing to _use_ that information

    • I don't think it will directly make for expensive products. It will do so indirectly by making Amazon leary of putting up listings for fly-by-night operations. Some sectors will see reduced competition from junk and go up in price, others will not. The cost of high end cameras and kitchen gadgets will stay constant. The cost of batteries and USB drives will go up a little.

      More importantly, it will be more difficult to sell stuff you make in your garage in small numbers. I could easily see Amazon starting t

    • I am a lawyer, but this is not legal advise. If you want legal advice, pay my retainer!

      In short, this is a consistent and unsurprising evolution of the law. Also note that this is for product liability, not warranty/quality.

      Over the 20th century, product liability law changed. Today, every merchant in the distribution chain, from manufacturer through each wholesaler down t o the final merchant, is liable if someone is injured *by a defect* in the product, while the shipping companies, credit car

    • Amazon has for too long profited from many counterfeit goods

      Heh..yep. Had no idea how bad it was until I started looking for a 512G microSD card.
      Just gotta wonder who buys these things... Hmmm...most of these things cost a hundred bucks, but here's one that's only twenty. Clearly the $20.00 one is the better value for money!

  • Telephone vs. television (Score:1)

    by Anonymous Coward

    What is Amazon? Is it more like a telephone, or more like a television? I say more like a television. Why is this important? Because a telephone company doesn't know who says what to whom. They might know what phone number made a call to another phone number, when, and where, but that's all they need to know to collect their fees. A television company carrying an advertisement, a program, or news item, has to know where this data came from before they put it on the air. As such they choose what they

  • This seems perfectly reasonable. If Amazon wants to profiteer off the sales from third parties then they damn well should be liable as well for the damages caused by those profits. This is exactly the same deal Piratebay got: making available links to pirated content is one thing, but when you profiteer off ads by making these links available you enter a new level of responsibility.

    Amazon is more than happy to sell third party products. They make a lot of money doing it. That comes with a new level of respo

  • Defective goods (Score:5, Interesting)

    by nehumanuscrede ( 624750 ) on Wednesday July 03, 2019 @09:08PM (#58870414)

    Defective goods are one issue. Counterfeit goods, however, are the bigger problem in my opinion.

    There are some things I simply will not buy online, including from Amazon, due to the potential of getting a counterfeit instead of the real deal.
    ( Mostly higher end camera gear, lenses and accessories )

    This is important to me because I don't want a cheap knockoff battery made in some guys garage inside a $6k camera body. :|

    • Reminds me of the people that burned up their $1000 iPhones with cheap $5 chargers purchased on Amazon.

  • So if I buy a $5 128GB flash memory from Amazon with bad reviews that claim it is really only 4GB, Amazon is responsible?

    • Re: (Score:2, Insightful)

      by Anonymous Coward

      Yes.

    • If they cannot or will not connect you with the real vendor to file suit, yes. Amazon or other online vendors accepted money to establish communications between the customer and the vendor. To actively or passively shield the vendor from followup is negligent.

    • Re:cheap flash memory (Score:4, Informative)

      by froggyjojodaddy ( 5025059 ) on Thursday July 04, 2019 @07:31AM (#58871906)
      IMO, yes. If it has sufficient bad reviews, that should be a warning sign to you but importantly, to Amazon to pull it off their site.
    • If they obscure or act as a shield for the vendor and you can't get in contact with the real seller then yes they are responsible.
    • Think of it in terms of the process needed to remove mis-labeled flash memory from the store. If Amazon is not responsible, then it has no incentive to remove that seller's offering from their store, and more people will be ripped off as you were. If you make them partially responsible (evidently, in the case where the original seller cannot be contacted or sued - e.g. was shipped directly from China), that creates an incentive for Amazon to clear such bad sellers and their fake items out of the their sto

  • "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."

    But isn't this true of ANY business? If I buy item X from company Y, and later I want to sue them but can no longer find them... who do I sue? Why does Amazon have to hunt them down? If they have provided all contact/personal info about the vendor, what else should they be expected to do?

    • But isn't this true of ANY business? If I buy item X from company Y, and later I want to sue them but can no longer find them... who do I sue?

      Amazon conceals them while they're still actively listing. You can't get real contact info for sellers on Amazon unless they go out of their way to include it in the listing.

      • Neither Oberdorf nor Amazon has been able to locate any representative of the Furry Gang, which has not been active on Amazon's site since 2016, according to court papers.

        Amazon has been trying to find/contact them, but is unable to.

        • Amazon has been trying to find/contact them, but is unable to.

          True, and that would be a decent defense, except that what I said is also true: You can't reach them even when they're still active sellers. That's why I suspect Amazon may be in trouble on this one. I expect them to settle rather than allow a precedent to be set.

  • Here's the actual opinion (Score:5, Insightful)

    by SlaveToTheGrind ( 546262 ) on Wednesday July 03, 2019 @10:28PM (#58870640)

    Link here [justia.com]. Most central to the outcome is this four-factor test to determine whether Pennsylvania strict product liability law should apply to Amazon for this transaction:

    (1) Whether the actor is the “only member of the marketing chain available to the injured plaintiff for redress”;
    (2) Whether “imposition of strict liability upon the [actor] serves as an incentive to safety”;
    (3) Whether the actor is “in a better position than the consumer to prevent the circulation of defective products”; and
    (4) Whether “[t]he [actor]can distribute the cost of compensating for injuries resulting from defects by charging for it in his business, i.e., by adjustment of the rental terms.”

    Somewhat unsurprisingly, they found against Amazon on all four factors.

  • I have a small amount of sales on Amazon (mostly old stuff and things laying around). However I was able to follow their changes to the program over the years.

    Basically they want to have maximum profits in each step.

    For example,
    You can use Amazon for drop shipping, while you can also drop ship to Amazon customers
    You can use Amazon warehouses to sell, or do "seller fulfilled prime" where you get a larger cut
    You can list a new product on Amazon, but you can also undercut them on their own listings

    They do all

  • guess the court ruling will apply to all retailers like walmart - let the lawsuits begin!

  • Amazon intermingles its own stock with stock from third-party sellers, so that even if you buy something "sold by Amazon", you might still be getting an item from a third-party seller who is using "Fulfilled by Amazon". So you might think you're getting a genuine item from Amazon, but instead you're getting a counterfeit product from a third-party seller.

  • Its about responsibility (Score:3)

    by rahvin112 ( 446269 ) on Thursday July 04, 2019 @01:46AM (#58871136)

    If Amazon cant provide verifiable and accurate legal contact information, on sellers using their marketplace, for service of process in legal claims then they should be liable instead. Anyone selling on Amazon should have to provide such information.

    In my mind thats basic common sense, if they collect the information and can provide it in legal suits they shouldn't be liable, but if they don't or can't provide contact info they should be liable as a result.

    • Re: (Score:2)

      by AmiMoJo ( 196126 )

      Amazon should just be liable, full stop. None of this "we are just a marketplace" crap. They mix their own and the 3rd party stuff together, often they deliver 3rd party goods from their own warehouse. Making them liable would be an incentive to actually vet the sellers and the products.

  • Generally have an extremely low opinion of Amazon.

    The marketplace feedback system is obviously intentionally broken. Virtually impossible to view a sellers negative feedback. Have to click next page on a list of 5 items at a time with no useful filtering.

    It STILL takes seconds to locate obviously fraudulent items for sale on Amazon.
    Search "1tb usb flash" only $19.95 /w FREE SHIPPING. What a steal.

    Go into the seller feedback of the jokers selling this garbage and you will find shit like this:

    "This was a F

    • The marketplace feedback system is obviously intentionally broken. Virtually impossible to view a sellers negative feedback. Have to click next page on a list of 5 items at a time with no useful filtering.

      If one uses the website, one can click on the "1 star" hyperlink and see all the one star reviews.

      It STILL takes seconds to locate obviously fraudulent items for sale on Amazon. Search "1tb usb flash" only $19.95 /w FREE SHIPPING. What a steal. Go into the seller feedback of the jokers selling this garbage and you will find shit like this: "This was a FAKE product as many others have posted. Files went missing, corrupted. The actual capacity of this device is FAR below what was advertised and is..."

      You mean something that sounds too good to be true is? Imagine that.....

      Only impossible to actually read that text because strike thru is enabled with the following: "Message from Amazon: This item was fulfilled by Amazon, and we take responsibility for this fulfillment experience."

      This sounds like someone gave a low rating and complained about shipping and Amazon said "Our bad". That doesn't sound like a problem with the product

      By the way this is not just one that was cherry picked where someone at Amazon just fucked up... it's **ALL** of the negative feedbacks like this at least out of the sellers I've looked into.

      You said it is impossible to see the negative feedback and you say you have looked at all the negative feedback on a specific seller.. Which is it? Did you suddenly discover the ability to vi

  • Agents in Common law (Score:3)

    by Martin S. ( 98249 ) on Thursday July 04, 2019 @05:52AM (#58871664) Journal

    This is to be expected: It has long been recognised that those acting as an agent are equally liable in common law. Amazon and similar can try to dress it up all they like but common law trumps contract law.

    https://en.wikipedia.org/wiki/... [wikipedia.org]

  • The multiple incarnations of the online Silk Road were found complicit in the misdeeds of their linked merchants.

    Therefore Amazon can and must be.

    • Silk Road acted with knowledge in furtherance of criminal conspiracy of it's buyers and sellers.
      Amazon acted with, possibly deliberate, indifference to the possibility of criminal activity buy it's sellers to it's profit.
      These are very different things.

  • "The most impactful way we can improve the experience of delivering music to Spotify for as many artists and labels as possible is to lean into the great work our distribution partners are already doing to serve the artist community,"

    What a marvelous example of corpspeak.

    Translated it means: "We're gonna limit your ability to use our service. Why? Because FUCK YOU, that's why. And of course money, we want all the money."

  • When some stupid product kills me, my heirs won't be able to find the bastards and sue them.

    Let's be honest here, American products are sometimes very low quality. But I'll gladly pay double if it means someone can be held liable for negligence in safety and defects in manufacture.

  • Good to hear that they will be liable. This awful Market Place trend is good only for the big name behind it. If it meant better prices for us, but most of the time is even more expensive or just cartel price. Good news.

  • If Amazon is now responsible for other sellers, eBay has a nightmare on their hands.

  • Walmart website has become similar to Amazon. This ruling opens up Walmart to liability for the crap they and their client vendors sell.

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