The question of whether Amazon can be held liable for defective products sold on third parties to third parties is one that the e-commerce giant has wanted to settle for a long time. It came a little closer to an answer on Thursday when an appeals court in California ruled that Amazon, at least in the Golden State, has a lot to worry about.
Amazon user Angela Bolger claims in a case that a replacement laptop battery purchased from a third-party Amazon seller, Lenoge Technology HK Ltd, exploded, causing them to endure “bad burns” to their arms, legs and feet. Bolger wanted Amazon to be held directly responsible for distributing the defective product, but a San Diego Superior Court ruled in Amazon’s favor, finding that it acted as a service provider in the chain of sales and was not liable under the state’s product claim law.
But an appeals court in California said on Thursday that Amazon should indeed “be held liable if a product sold through its website is found to be defective.” In the opinion written by Justice Patricia Guerrero, the court ruled that the online retailer took a direct role in every part of the sale and acted as much more than just a service provider connecting customer and distributor. Guerrero writes:
As a matter of fact and law, Amazon placed itself between Lenogeand Bolger in the chain of distribution of the product in question here. Amazon accepted possession of Lenoge’s product, stored it in an Amazon warehouse, pulled Bolger to the Amazon website, provided her with a product list 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 terms of Lenoge’s offer to buy on Amazon, restricted Lenoge’s access to Amazon’s customer information, forced Lenoge to communicate with customers through Amazon, and demanded damages such as substantial fees on each purchase. Whatever term we use to describe the role of Amazon, whether it is “retailer”, “distributor”, or just “facilitator”, it was very important in bringing the product here to the consumer.
In a pronunciation to Congress in July, Amazon founder Jeff Bezos said that third-party sales in the Amazon market account for about “60% of physical product sales on Amazon, and that sales are growing faster than Amazon’s own retail sales.” The company has been arguing for years that it acts as a facilitator in these transactions and that it does its best to police the platform. That argument has previously worked, but different states have different claims laws. But every now and then it does not fly in Cali.
These days we hear most about Section 230 of the Communications Act in relation to debates on speech on social media platforms. The federal law provides protection of liability to websites for content created by users. The 26 words in paragraph 230 have caused countless arguments and the question of whether they apply to third-party sellers in online marketplaces sometimes raises his head. In the Bolger case, the California Court of Appeals denied it that argument, write:
Amazon is not protected by liability under Title 47 Section 230 of the United States Code. That section, introduced as part of the Communications Decency Act of 1996 (CDA; Pub.L. No. 104-104, Title V (Feb. 8, 1996,) 110 Stat. 56) generally prevents Internet service providers from being held liable if speaker as a third-party content publisher. This does not apply here, as Bolger’s strict liability depends on Amazon’s own activities, not on its status as a speaker and publisher of content provided by Lenoge for its product list.
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Amazon declined to comment when contacted by Gizmodo about the decision, and it ‘s unclear what kind of precautionary measures it will have to take forward. As CNBC points out, the company is involved in similar lawsuits in other states, including Minnesota en Pennsylvania.
The good news for Amazon is that it’s already obscene profits have exploded since the world entered a life-threatening pandemic. His war chest is ready enough for any adjustment that will be necessary in the future to cover his own ass.
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