This week a New York Judge said no they can’t. Amazon.com was cleared of blame for selling a defective blender that caused a fire in a sushi restaurant.
Judge Dennis Hurley decided that Amazon never had ownership of the blender so they were not liable for the property damage caused by the blender. Thankfully no one was hurt in the fire but this case begs the question; can Amazon be held liable for injuries caused by goods bought on its website?
Amazon does sell some products itself but it also allows millions of third party sellers to list their products on its online marketplace. In this case the restaurant bought a blender for $200. Amazon charged the Chinese company that manufactured the blender 15% for its services, although Amazon contended that the manufacturer of the blender is unknown because they had used a fictitious name and no longer had an active Amazon account. Amazon agreed to warehouse and ship the blenders with an Amazon package sticker on the box to the ultimate consumers. They say they had nothing to do with the design and manufacture of the blenders.
In the UK our legislation imposes liability upon an importer of a product if they do not disclose who the manufacturer of the product is. Not so under New York law; only those entities that are within the distribution chain can be held strictly liable. In this case Amazon never took “title” of the blender, so they never owned it. Amazon has escaped liability in a dozen or so similar cases, involving hoverboards, laptops, coffee makers and headlamps before this ruling.
Earlier in the year however, in a US Court of Appeal decision Amazon was found to be a seller of a retractable dog leash under Pennsylvania product liability law. The judges decided that Amazon was the only member of the marketing chain available to the injured plaintiff for redress. Imposing liability on Amazon serves as an incentive to safety because they could remove the products from circulation; Amazon is in a better position to prevent the circulation of defective product; and Amazon can distribute the cost of compensating for injuries resulting from defects by charging for it in its business. This ruling only applies under Pennsylvania law but it does shift the burden of identifying the third party seller or manufacturer from the consumer to Amazon who would be best placed to demand a contribution from the manufacturer.
At about the same time two similar decisions were made against Amazon in cases involving a defective bathtub tap in Wisconsin and a defective scooter in New Jersey.
Since the sales from third party sellers make up to 58% of products sold on Amazon and account for $43 billion to Amazon in commissions and fees it was unlikely that they would simply accept responsibility for the 300 million products sold on its website by third party sellers. Not surprisingly Amazon is appealing the Pennsylvania court decision. The appeal goes to court in February 2020.
In the UK, and in fact across Europe, liability is governed by the EU Product Liability Directive (PLD). This imposes liability on the producer of a product and/or the importer of a product into the EU. But can an operator of an online marketplace be an “importer”, for example a product shipped directly to the consumer from China? Could the consumer, not the online platform operator be considered the importer? Under Article 3(3) of the PLD, liability is imposed on a supplier where the producer or importer can’t be identified. Could Amazon be considered as a supplier? Their product liability position hasn’t been tested in the UK. The problem is our legislation governing product liability dates back to before the internet and doesn’t cater for the advancement in technology but changes are being considered by the legislators to include online marketplaces in the list of organisations that could be held liable.
So the answer to the question “can Amazon be liable for defective Christmas presents you buy online?” is maybe in 2020 they can.
