Recent Ruling on Amazon May Have Unintended Consequences for Customers and Third-Party Sellers

By Jeffrey J. Downey, personal injury lawyer, serving Maryland, Virginia and Washington DC 

In late summer 2021, Amazon announced a policy in which it will pay customers up to nearly $1,000 when a third-party product causes property damage or personal injury and possible compensation of up to $1 million for medical expenses, lost wages from such product.  The payments will be made to sellers who hold valid insurance, but Amazon says it will also pay customers more than that when a seller refused a valid claim.  This change in policy took effect on September 1st, but current litigation may change the situation for both customers of Amazon and sellers who use its platform.   

This announcement likely came about because of a complaint filed by the US Consumer Product Safety Commission (CPSC) against Amazon over the sale of hundreds of thousands of hazardous products, such as carbon monoxide detectors that fail to detect carbon monoxide, says personal injury lawyer Jeffrey J. Downey. 

“The CPSC is sending a message to Amazon to take more responsibility for dangerous products offered under the Fullfilled-by-Amazon (FBA) program.  In a sense, the promise to pay small claims of $1,000 at no cost may minimize objections from third-party merchants while giving customers a reason to avoid litigation,” says Downey. 

A statement from Amazon regarding the September 1st policy says “If you do make a claim through the A-to-z Claims Process, you agree you will not file a claim in an alternative forum (like a court or arbitration) until we have a chance to notify you of a decision on your claim.”  Amazon says it “usually” resolves claims within 90 days and that customers can “withdraw a claim made under this process at any time.” 

In layman’s terms, Amazon is a reseller.  Think of it like a ticket broker such as StubHub.  And because Amazon doesn’t purchase products and relabel them as their own., it is difficult to prove accountability in court that the large conglomerate has any product liability. 

What’s made in clear in the new policy is that Amazon’s position is that it is legally liable for products that are defective. 

As for the possible change in Amazon’s position, an older case may just do that.  As reported in the Washington Post recently, the case, Bolger v Amazon LLC, was brought in 2016 by a customer who purchased a replacement battery or Chinese-made battery for her laptop, as the battery caught fire and caused injury and personal property damage. The court judged in favor of the plaintiff won the case, and because the name of the Chinese company could not be located, Amazon was the sole remaining defendant.  When the name of the company was revealed after the fact, it prompted Amazon to stop storing the product and reselling it through its website.  In addition, third-party sellers must obtain product liability insurance if their sales reach $10,000 a month.  

As of late October, Amazon’s quarterly earnings were over $100 billion.  That’s Billion with a B.

From a standpoint as a customer of Amazon, the old phrase “let the buyer beware” applies when it comes to third-party sellers who have not been vetted. 

If you have purchased a product from a third-party seller through Amazon or a similar company in person or online and have been injured in the process, contact the Law Office of Jeffrey J. Downey for a free consultation.