Court Rules Amazon Has No Liability In Dangerous Products Sales

Amazon is not liable for dangerous or deadly marketplace seller products.

May 24, 2019, Los Angeles, CA – Consumers shopping at their local drugstore, grocery, or retailer expect honest services and an assurance they will receive authentic, safe products. Laws exist to protect consumers who want to engage in commerce with high confidence that they won't be defrauded and that what's being purchased complies with product safety laws. Product liability extends to manufacturers, distributors, and retailers alike, and the consumer almost always has some legal recourse in the event of an injury,

But that's not true when consumers shop on Amazon. The e-commerce giant does not face the same traditional product regulations and liability that local retailers face if they sell a dangerous, defective or deadly product. 60% of Amazon sales are from unvetted third-party marketplace sellers, and Amazon, who takes no title to the product, has no liability whatsoever in these sales says a May 22, 2019 Appellate Court decision. (United States District Court for the District of Maryland 8:16-cv-02679-RWT). But Amazon still takes a transaction fee for each item sold.

"Amazon disrupts the traditional supply chain. By design, Amazon’s business model cuts out the middlemen between manufacturers and consumers, reducing the friction that might keep foreign (or otherwise judgment-proof) manufacturers from putting dangerous products on the market " says Circuit Court Judge, Diana Gribbon Motz.

Simply, if you buy a product from any Amazon marketplace seller (including items Fulfilled by Amazon) and it burns your house down, injures, or kills you, too bad -- Amazon has no liability. Amazon won't even notify buyers that they purchased a dangerous or potentially deadly counterfeit, fraudulent, or replica product.

And that is exactly what happens -- repeatedly. The cases below involve dangerous lithium-ion batteries sold on Amazon;

• A Tennessee family sued Amazon for $30 million after a counterfeit hoverboard caught fire and completely destroyed their $1 million Nashville home in 2016, injuring two of the family’s four children. The product was sold through Amazon Fulfillment Services according to the lawsuit. (United States District Court, 2018 WL 2431628)
• In the Maryland case, an Amazon headlamp “for cycling, camping, [and] hiking” given as a gift malfunctioned, the lithium-ion batteries ignited and caused $313,166 in damages to the recipients Maryland home. The headlamp was “Fulfilled by Amazon.” The Appellate Court confirmed that Amazon "was not, in the circumstances of this case, a seller and therefore did not have liability under Maryland law."
• A Georgia man sued Amazon after his home was destroyed and he suffered burns to his head, face, back, and shoulders requiring skin grafts from a fire started by lithium-ion batteries. The man's lawsuit was revived on May 17, 2019 by an Appellate Court decision. (1:18-cv-00540-TWT)

Shockingly, even after being served legal notice in March 2019 by The Counterfeit Report, an award-winning industry watchdog and consumer advocate, to stop the fraudulent lithium-ion batteries sold on its website, Amazon continues to allow the products and has sold 6,513 of the 29,000 lithium-ion batteries listed since the notice.

This isn't supposed to be happening in America; a land packed full of laws specifically constructed to protect consumers and prevent consumer injuries like those mentioned above. However, these laws are starkly ill-prepared for the internet age. As put best by the judge in the landmark Milo and Gabby lawsuit (U.S. District Court for the Western District of Washington 2:13-cv-01932) which also removed Amazon from liability for what is sold on their platform: "There is no doubt that we now live in a time where the law lags behind technology. This case illustrates that point."

Amazon has made a big push to get more Chinese vendors selling to people in the U.S. -- including the creating of a special maritime agreement which allows Chinese merchants to ship full container loads of products straight to Amazon's U.S. warehouses. That, combined with the USPS policy of providing Chinese merchants with subsidized shipping rates (enabling them to mail parcels to the U.S. at a fraction of the cost to mail the same parcel domestically), means that U.S. markets are wide-open for the exact same "bad actors," fraudsters, and criminals who have long polluted China's e-commerce ecosystem.

Through huge legal loopholes, and virtually immune to prosecution, IP laws, and safety standards, Amazon continues to enable and facilitate criminal activity and profit from counterfeit sales which destroy manufacturers and directly impact consumer safety, jobs, and public trust. Those who violate our laws shouldn't be allowed to engage in commerce here, but they do, and Amazon is a big part of those sales.

Consumers are better served and protected supporting local retailers and often buy at better prices if they check other online websites. "Costco is the cheapest by a landslide, with an average discount of 19% on items where there was a price discrepancy" reports Business Insider, and many retailers will price match online sellers.

When shopping on Amazon, the mantra of the day is clearly "buyer beware - the life you save may be your own."