Amazon has long contended that it is not liable for products sold through its platform by third-party sellers. However, a court order from an administrative judge in the US Consumer Product Safety Commission found otherwise last Monday, ruling that Amazon must develop an action plan to deal with the over 400,000 hazardous items sold on the site. The Order states:
“The Commission adopts the ALJ’s finding that Amazon operated as a distributor for purposes of the CPSA when it received, stored, and delivered the hazardous products through its Fulfilled by Amazon program. The Commission also accepts the Parties’ stipulation that the relevant products distributed by Amazon pose substantial product hazards.”
From a supply chain perspective, a decision like this is a big, no – HUGE – deal. If Amazon can be held liable for its third-party seller’s defective and dangerous products, could that liability also extend to other online commerce sites or issues like labor conditions? We’ve seen a recent willingness globally to hold companies responsible for the actions of their suppliers abroad through legislation like the Corporate Sustainability Due Diligence Directive (CS3D) in the EU and recent consumer protection enforcement in Italy. It’s unclear just how far jurisdictions are willing to push theories of liability for actions of a company’s supply chain partners. In Amazon’s case, the company will appeal the ruling, which means any definitive resolution of the issue is likely months or years away. Even so, I wouldn’t be surprised to see Amazon pull products and/or increase product safety and quality mandates with more oversight anyway.
Our members can learn more about supply chain due diligence here.
If you aren’t already subscribed to our complimentary ESG blog, sign up here for daily updates delivered right to you.
Photo credit: Sundry Photography – stock.adobe.com
