Court rules Amazon can be held responsible for defective third-party goods


Enlarge / Completed customer orders are seen in their boxes, awaiting delivery, at the Amazon Fulfillment Centre on November 14, 2018, in Hemel Hempstead, England. (credit: Leon Neal | Getty Images)

Shoppers who end up stuck with a defective dud product sold by some fly-by-night third-party Amazon seller may finally have an avenue of recourse: a federal court has become the first to rule that Amazon can be held liable for what its “marketplace” vendors sell.

The US 3rd Circuit Court of Appeals, in Philadelphia, issued an opinion (PDF) that said Amazon qualified as a “seller” under Pennsylvania state law, at least for the purposes of the suit. While Amazon argued that every item sold on its site could be traced to a specific vendor, the court said that Amazon “fails to account for the fact that… third-party vendors can communicate with the customer only through Amazon,” which “enables third-party vendors to conceal themselves from the customer, leaving customers injured by defective products with no direct recourse.”

Amazon in its most recent quarterly report said its sprawling third-party marketplace accounted for more than 18% of the entire company’s sales, bringing in $11.14 billion in three months. Analysts expect third-party marketplace revenue to eclipse Amazon’s own first-party sales this year. While that largely laissez-faire digital agora brings in bank for the company that hosts it, consumers for years have faced mounting challenges with recalled products, toxic goods, counterfeits, and complete crap.

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