August 17, 2020
The California Fourth District Court of Appeals ruled that Amazon can be held liable for the damages created by a defective replacement laptop battery purchased from a third-party seller on its marketplace. The buyer, Angela Bolger, reportedly got third degree burns when the battery, from Amazon third-party seller Lenoge Technology, caught fire. Amazon has defended itself against such liability lawsuits so the appeals court decision is a major blow to its e-commerce business. The company currently faces several other liability suits.
CNBC reports Bolger’s attorney Jeremy Robinson noted that, “consumers across the nation will feel the impact of this.” Third-party sellers on Amazon’s site now account for “approximately 60 percent of the company’s e-commerce sales.”
Over the years, third-party sellers have hawked “counterfeit, unsafe and even expired goods.” Amazon has stated that “it invests hundreds of millions of dollars per year to ensure products sold are safe and compliant” and also pointed out that, “it’s only the conduit between buyers and sellers on its marketplace and that it’s not involved in the sourcing or distribution of products sold by third-party sellers.”
The latter was Amazon’s rationale that it is free from liability, and it worked in the past, including a 2018 case in which a hoverboard exploded and burned down the Amazon shopper’s house.
In the case that found Amazon liable, the Court of Appeals placed Amazon in “the chain of distribution,” by storing the battery in its warehouses, accepting payment and shipping the product, as well as determining “the terms of its relationship” with the third-party seller and demanding “substantial fees on each purchase.” The court wrote that, “under established principles of strict liability, Amazon should be held liable if a product sold through its website turns out to be defective.”
The court also stated that Amazon can’t be “shielded from liability” via Section 230 of the Communications Decency Act, which “protects online platforms from being held responsible for content their users post on their sites.”
The Verge reports that Bolger’s purchase of the replacement battery on Amazon was from “E-Life, a fictitious company name for Lenoge Technology, which shipped the battery to her in Amazon-branded packaging.” When it exploded several months later, Bolger stated that, “she was never notified of safety concerns that led to E-Life being banned from Amazon’s platform.”