Amazon was hit with a legal defeat this week after a California appeals court ruled that the company can be held legally liable for defective products sold on its site by third-party sellers.
In a unanimous decision issued Thursday, Judge Patricia Guerrero of the Fourth District Court of Appeals wrote that “under established principles of strict liability, Amazon should be held liable if a product sold through its website turns out to be defective.”
The case concerned a replacement laptop battery that Amazon customer Angela Bolger purchased from a Hong Kong-based company called Lenoge Technology, which went by “E-Life” on Amazon’s online marketplace. Bolger alleged in her lawsuit that “the battery exploded several months later, and she suffered severe burns as a result,” for which she argued Amazon should be held responsible.
Amazon had argued that it wasn’t liable because “it did not distribute, manufacture, or sell the product,” and that Lenoge was the seller.
But the court disagreed, finding that Amazon played such an outsized role in the transaction that it bore the responsibility for the defective battery.
Guerrero wrote that Amazon “placed itself between Lenoge and Bolger in the chain of distribution… accepted possession of the product… stored it in an Amazon warehouse… attracted Bolger to the site… provided her with a product listing… received her payment… shipped the product in Amazon packaging… controlled the conditions of Lenoge’s offer for sale… 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.”
Jeff Bezos’ monster exerts a tremendous amount of control over its, “3rd party vendors,” and to quote
Peter Parker Steve Ditko and Stan Lee, “With great power, comes great responsibility.”*
Doing things like stealing 3rd party data to develop competing products indicates that Amazon is more than just a simple store front.
“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,” she concluded.
The court also didn’t buy Amazon’s statement that it should be protected under section 230 of the Communications Decency Act of 1996, which shields internet companies from legal repercussions for content published by third parties on their sites.
It determined that section 230 didn’t apply because Bolger’s claims “depend on Amazon’s own activities, not its status as a speaker or publisher of content provided by Lenoge for its product listing.”
Pending the results of a possible appeal, Thursday’s ruling potentially opens up the online retail giant to significant legal exposure from other customers who could bring similar lawsuits for faulty or damaged products. It could also force Amazon to adjust its policies to more tightly regulate third-party sellers.
It does seem that the whole internet economy thing is increasingly just a mechanism for vendors to cheat people and avoid consequences.
*Peter Parker never said this, it was in the final panel of the first Spider Man comic book.