MGR eCommerce Edge Weekly | May 5, 2021
Top News This Week
What a New California Court Ruling Means for Amazon & Sellers
A California court is holding Amazon liable for a defective product sold by a third-party seller, setting a precedent for future cases with similar scenarios.
The case is Loomis v. Amazon, in which a customer sued after buying a defective hoverboard from an Amazon seller in 2015. The hoverboard set her house partially on fire after her son plugged it in. The case sought to answer the question of whether or not Amazon is a neutral third party to the sale, or could it be classified as that product’s “seller,” meaning it could be liable for damages? The court concluded with the latter point — because Amazon was in the “vertical chain of distribution” for the product, meaning that Amazon interacted with customers, processed the order and received a percentage of sale, it said Amazon could be characterized as the seller of the product.
The court ruled that Amazon holds liability for both FBA & FBM products. This is a big deal because Amazon will now have to be an even harsher enforcer when it comes to product safety. This may sound good on it’s surface, but Amazon’s approach to working with sellers is often via blunt instruments, not precision tools
What this ultimately means for sellers isn’t yet clear, but they can fully expect Amazon unforgiving ways to continue now that they are at risk of being held liable for seller mistakes.