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Appeals court says Amazon is liable for third-party sellers’ products

Amazon CEO Jeff Bezos excursions the power on the grand opening of the Amazon Spheres, in Seattle, Washington on January 29, 2018.

Jason Redmond | Getty

A federal appeals courtroom dominated that Amazon may be held accountable for faulty items bought on its website by third-party distributors, who now account for greater than half of the corporate’s e-commerce income.

The choice on Wednesday, from a courtroom in Philadelphia, reverses the decrease courtroom ruling and could possibly be vital for Amazon, which has confronted criticism for enabling counterfeits and harmful gadgets to promote via its platform.

Amazon has beforehand escaped legal responsibility for its distributors’ merchandise. Final 12 months, a decide in Tennessee dominated the corporate was not accountable for damages attributable to a faulty hoverboard that exploded, burning down a household’s home. The plaintiff, who purchased the product on Amazon’s website, claimed the corporate didn’t sufficiently warn of the product’s risks.

The choice on Wednesday associated to a case by which a Pennsylvania buyer, Heather Oberdorf, bought a retractable canine leash on Amazon.com from a third-party vendor, The Furry Gang. Whereas strolling her canine in 2015, Oberdorf was blinded after the leash instantly recoiled. Neither Oberdorf nor Amazon have been capable of contact The Furry Gang.

“Amazon fails to account for the fact that under the Agreement, third-party vendors can communicate with the customers only through Amazon,” the ruling states. “This enables third-party vendors to conceal themselves from the customer, leaving customers injured by defective products with no direct recourse to the third-party vendor.”

Amazon didn’t reply to a request for remark.

CEO Jeff Bezos touted the expansion of {the marketplace} in his most up-to-date letter to shareholders, writing that, “To put it bluntly: Third-party sellers are kicking our first party butt. Badly.”

WATCH: How Amazon made report income in 2018

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