• Economy
  • Editor’s Pick
Money Rise Today – Investing and Stock News
  • Investing
  • Stock
Investing

Amazon can now be held responsible for defective products sold by third-party sellers

by July 30, 2024
written by July 30, 2024

In a groundbreaking move that could reshape the e-commerce landscape, the US Consumer Product Safety Commission (CPSC) has ruled that Amazon can be held accountable for defective goods sold by third-party merchants on its platform. 

This landmark decision marks a pivotal shift in how the e-commerce giant is regulated, potentially impacting millions of transactions and setting a new precedent for online marketplaces.

On Tuesday, the CPSC unanimously determined that Amazon fits within the legal definition of a distributor and thus bears responsibility for recalling defective products sold through its marketplace. 

This decision requires Amazon to develop and implement a plan to notify consumers about hazardous products and offer refunds or replacements. 

With Amazon’s marketplace representing approximately 60% of its e-commerce sales and hosting millions of third-party sellers, this ruling could have widespread implications.

Amazon has long defended its role as merely an intermediary, asserting that it is not involved in the direct sourcing or distribution of third-party products. 

This defense has often shielded the company from liability, including in a notable 2018 case involving a defective hoverboard that caused a house fire. 

However, the CPSC’s recent action challenges this position and demands a more proactive approach from Amazon regarding product safety.

The backdrop of Amazon’s legal challenges

The CPSC’s ruling addresses a contentious issue that has been the subject of numerous lawsuits and legislative scrutiny. 

In 2021, the CPSC took legal action against Amazon, demanding a recall of hundreds of thousands of hazardous products sold on its platform, including faulty carbon monoxide detectors, unsafe hairdryers, and children’s sleepwear posing a burn risk. 

Although Amazon took steps to remove these products and inform affected purchasers, the CPSC deemed these measures insufficient, arguing that a full refund process would be more effective in ensuring consumer safety.

Historically, Amazon has relied on the argument that its role is limited to providing a platform for buyers and sellers, with third-party sellers maintaining control over their products. 

However, the CPSC’s ruling dismisses this argument, citing Amazon’s extensive control over inventory through its Fulfilled by Amazon (FBA) service. 

This service allows sellers to store products in Amazon’s warehouses, giving Amazon significant oversight and control over the products sold.

A new layer of responsibility 

The CPSC’s decision has far-reaching implications for both Amazon and the third-party sellers using its platform. 

For Amazon, the ruling introduces a new layer of responsibility and potential liability, requiring the company to enhance its product safety measures and compliance strategies. 

This could involve substantial changes to how Amazon manages its marketplace and handles defective products.

Third-party sellers, who rely on Amazon’s extensive reach to access millions of customers, may also face increased scrutiny and higher compliance costs. 

They will need to ensure that their products meet safety standards and adhere to new regulations, potentially impacting their operational practices and profitability.

This ruling underscores the growing importance of consumer protection in the expanding e-commerce sector. As online marketplaces continue to evolve and dominate the retail landscape, ensuring the safety and reliability of products sold through these platforms becomes increasingly crucial. 

The CPSC’s decision represents a significant step toward more robust oversight and accountability, emphasizing the need for e-commerce platforms to take an active role in safeguarding consumer interests.

As Amazon responds to this ruling, its actions will be closely monitored by regulators, consumers, and industry stakeholders.

The company’s approach to enhancing product safety and compliance will be a critical factor in determining how this decision influences future regulations and practices in the e-commerce industry.

The post Amazon can now be held responsible for defective products sold by third-party sellers appeared first on Invezz

0 comment
0
FacebookTwitterPinterestEmail

previous post
Nasdaq is testing a key support level, which stocks hold the key?
next post
Tesla recalls 1.8 million vehicles over unlatched hood issue

related articles

Asian markets open: Nikkei, Hang Seng fall on...

June 12, 2025

Aluminum and steel tariffs spark rise in secondary...

June 12, 2025

Airbus sees aviation boom ahead, global fleet to...

June 12, 2025

US-China trade talks and Washington’s decade-long effort to...

June 12, 2025

Europe markets open: Stoxx 600 dips as UK...

June 12, 2025

UK GDP falls by 0.3% in April as...

June 12, 2025

Gordon Brothers buys Poundland; pledges £80 mn for...

June 12, 2025

Air India plane crash: London-bound flight with 242...

June 12, 2025

Air India plane crash live update: Indian President...

June 12, 2025

Copper remains supported for now even as China...

June 12, 2025
Enter Your Information Below To Receive Free Trading Ideas, Latest News, And Articles.


Your information is secure and your privacy is protected. By opting in you agree to receive emails from us. Remember that you can opt-out any time, we hate spam too!

Latest News

  • Sandra Lee shares breaking point in split from Andrew Cuomo: ‘Every window and door closed’

    August 6, 2024
  • GOP congressman takes major step toward gubernatorial announcement

    June 11, 2025
  • Trump’s Defense pick goes on offense as support grows for Hegseth confirmation

    December 10, 2024
  • Unfinished Business: The budget cuts Musk couldn’t complete and what’s next for DOGE

    May 30, 2025
  • Russia launches largest attack on Ukraine this month following Trump’s meetings with Putin, Zelenskyy

    August 20, 2025

Popular Posts

  • 1

    Secret Service admits leaning on ‘state and local partners’ after claim it ignored Trump team’s past requests

    July 21, 2024
  • 2

    Five more House Democrats call on Biden to drop out, third US senator

    July 19, 2024
  • 3

    Elon and Vivek should tackle US funding for this boondoogle organization and score a multimillion dollar win

    December 4, 2024
  • 4

    Forex Profit Calculator: Maximize Your Trading Potential

    July 10, 2024
  • 5

    Biden calls to ‘lower the temperature’ then bashes Trump in NAACP speech

    July 17, 2024

Categories

  • Economy (829)
  • Editor's Pick (6,247)
  • Investing (634)
  • Stock (935)

Latest Posts

  • FLASHBACK: Arizona Dem Senate candidate called Trump voters ‘dumb’: ‘Worst people in the world’

    September 28, 2024
  • 5 mistakes that doomed Kamala Harris’ campaign against Trump

    November 8, 2024
  • Farm state Republicans appear skeptical about RFK amid his quest for HHS confirmation

    December 18, 2024

Recent Posts

  • Trump, South Africa in growing row over hotly contested land law, country’s deals with US foes

    February 9, 2025
  • Republicans ‘skeptical’ of DOJ move to block Russian election interference

    September 5, 2024
  • Putin ‘promises’ to ask Assad for help in finding Austin Tice following letter from mother

    December 19, 2024

Editor’s Pick

  • Trump dares AOC to try to impeach him: ‘Make my day’

    June 24, 2025
  • What is an autopen? The signing device at the heart of Trump’s attacks on Biden pardons

    March 20, 2025
  • Red Cross fighting to reach hostages, alleviate ‘catastrophic’ situation in Gaza

    May 22, 2025
  • About us
  • Contacts
  • Privacy Policy
  • Terms & Conditions

Disclaimer: moneyrisetoday.com, its managers, its employees, and assigns (collectively “The Company”) do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

Copyright © 2025 moneyrisetoday.com | All Rights Reserved

Money Rise Today – Investing and Stock News
  • Economy
  • Editor’s Pick
Money Rise Today – Investing and Stock News
  • Investing
  • Stock