Last year, Amazon, the online retail giant, was in the media spotlight for its inability or refusal to vet the products sold on its platform. A Wall Street Journal investigation found over 4000 mislabeled, unsafe, and banned products on Amazon’s Marketplace.
“Marketplace” is what the retail giant calls its online sales platform. It has been so successful that other retail giants like Walmart and Sears have followed suit. On its Marketplace, Amazon sells items under its own brand name, brand names it owns, and products listed by third-party manufacturers and suppliers. The third-party listings are the fastest-growing part of the Marketplace, accounting for almost 60% of Amazon’s sales by gross volume in 2019. Amazon profits from third-party sales by taking various fees and commissions from each sale.
Unfortunately, Amazon does not effectively prohibit its suppliers, often located overseas, from listing products on Amazon.com that do not meet U.S. safety regulations and would not be sold by other retailers here. As shown by the Journal investigation, this can result in numerous dangerous products being sold on Amazon.
Nevertheless, until recently, Amazon was able to avoid responsibility for injuries or damage caused by Marketplace products listed by third parties by claiming that it acted as merely a “facilitator” of the sale or a platform, not a retailer.
Attorneys Jeremy K. Robinson, Thomas D. Luneau and Jillian F. Hayes represented plaintiff Angela Bolger, who had been severely injured by a defective replacement laptop battery acquired from Amazon.com. While she was using it, the battery detonated like a bomb, causing Ms. Bolger to suffer serious and life-altering burn injuries.
The trial court initially ruled in favor of Amazon and dismissed the case, but CaseyGerry successfully appealed that ruling to the Court of Appeal. The appellate court reversed the ruling, finding that Amazon could be held strictly liable for defective products sold on its virtual marketplace. This is the first and only state appellate decision in the nation holding Amazon responsible for third-party products.
Due to this ground-breaking win, California has set a clear path to holding online retailers and facilitators responsible for products sold on their platforms.
Learn more about our E-Commerce liability practice here.