Court Holds Amazon Liable For Defective Products From Third-Party Sellers

Amazon box on wood floor

On Thursday, an appeals court in California ruled that Amazon is liable for defective products sold by third-party merchants on its marketplace platform.

In a unanimous decision, the appeal court overturned an earlier ruling from a trial court that ruled in favor of Amazon’s motion for summary judgment.

In its decision, the appeal court wrote, “under established principles of strict liability, Amazon should be held liable if a product sold through its website turns out to be defective.”

Bolger v. Amazon

The case was filed by Amazon customer Angela Bolger who purchased a replacement laptop battery from Hong Kong-based company Lenoge Technology (E-Life on Amazon’s marketplace) which allegedly exploded and caused her severe burns.

She argued in her lawsuit that Amazon should be held liable for the product she purchased on the marketplace, yet the company argued it wasn’t liable as it did not distribute, manufacture, or sell the product.

However, the appeal’s court disagreed and wrote, “Amazon placed itself between Lenoge and Bolger in the chain of distribution of the product at issue here.”

Amazon accepted possession of the product from Lenoge, stored it in an Amazon warehouse, attracted Bolger to the Amazon website, provided her with a product listing for Lenoge’s product, received her payment for the product, and shipped the product in Amazon packaging to her.”

Amazon set the terms of its relationship with Lenoge, controlled the conditions of Lenoge’s offer for sale on Amazon, limited Lenoge’s access to Amazon’s customer information, forced Lenoge to communicate with customers through Amazon, and demanded indemnification as well as substantial fees on each purchase.

“Whatever term we use to describe Amazon’s role, be it “retailer,” “distributor,” or merely “facilitator,” it was pivotal in bringing the product here to the consumer.”

The court also dismissed Amazon’s argument that it should be protected under section 230 of the Communications Decency Act of 1996, that shields online content publishers.

The company can still appeal this ruling to the state’s Supreme Court.

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