Amazon is held accountable under federal safety law for dangerous products sold by third-party sellers on its platform and shipped by the company, as determined by a U.S. government agency on Tuesday.
In a unanimous decision, the Consumer Product Safety Commission stated that Amazon is considered a “distributor” of faulty items sold on its website and fulfilled through its services.
This ruling means that Amazon is legally responsible for the recall of over 400,000 products, including hairdryers and defective carbon monoxide detectors. The agency directed Amazon to establish a process for informing customers who purchased these faulty items and to remove them from circulation by offering incentives for their return or disposal.
Amazon has announced its intention to appeal the decision.
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Overall, Amazon represents about 40% of e-commerce sales in the U.S., according to Emarketer. The company directly sells a wide range of products to consumers and collaborates with nearly 2 million third-party sellers who drive most of the sales on the platform.
Amazon has been disputing the “distributor” classification since 2021 when it was sued by the Consumer Product Safety Commission for allegedly distributing hazardous goods.
When notified about defective products three years ago, Amazon promptly informed customers to discontinue use and issued refunds, stated Amazon spokesperson Tim Doyle.
However, the agency criticized Amazon for not adequately encouraging customers to return or dispose of the faulty products, potentially endangering them. Instead of offering refunds, the company provided customers with Amazon.com credits in messages regarding the safety issues of the products.
Amazon argued against being classified as a distributor under the Consumer Product Safety Act but was unsuccessful. The administrative law judge and the commission upheld this decision with the order issued on Tuesday.
