Courts Say Amazon Liable For Third-Party Seller Missteps

An appeals court has ruled that Amazon can be held liable for third-party sales on its site, according to reports.

Amazon lets other merchants sell on its site and takes a cut, but now if something goes wrong it can potentially be found at fault.

In 2014, Heather Oberdorf bought a retractable dog collar from a seller, and while she was walking the dog it broke and flew into her eye, blinding her. She bought the collar from a seller called the Furry Gang, but she wasn’t able to locate anyone from the company, and neither was Amazon. The company hasn’t been active on the site since 2016. Oberdorf ended up suing Amazon for negligence.

A court in Pennsylvania ruled that she couldn’t sue Amazon because under the law, it wasn’t technically a seller, and also because it was covered under the Section 230 of the Communications Decency Act, which protects the platform from the actions taken by its users.

Oberdorf appealed and the court mostly ruled in her favor. The appeals court said Amazon could be held liable for its role in the sale, and that it might be protected when it comes to speech, but not in real world sales of goods.

In previous similar cases, courts have ruled in Amazon’s favor. This is the first case where that hasn’t happened.

“It’s gratifying that the 3rd Circuit agreed with our argument and recognized that the existing interpretation of product liability law in Pennsylvania was not addressing the reality, the dominance that Amazon has in the marketplace,” said David Wilk, Oberdorf’s lawyer, told Reuters.

Circuit Judge Jane Richards Roth wrote the decision, which was a 2-1 majority on a three-judge panel. The judge said Amazon might be liable because the company’s business model “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.”