Amazon can be held liable for defective products from third-party merchants, ruled a federal appeals court on July 3rd. The ruling from the United States Court of Appeals for the Third Circuit is the first court to hold Amazon liable for third-party products, as many other courts have said that Amazon isn’t liable for third-party vendors. Last quarter alone, Amazon made about $11 billion in revenue from services provided to third-party sellers, whose products make up about half of the items sold on Amazon, according to a report from database company Statista.
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The court’s decision is based on laws in Pennsylvania, where Heather Oberdorf, the woman who sued Amazon initially, was permanently blinded when a dog leash from a third-party seller on Amazon snapped in her face, according to a news article from Reuters. The third-party seller, The Furry Gang, hasn’t been active on Amazon since 2016, when she initially sued the tech giant.
The most recent ruling from the United States Court of Appeals for the Third Circuit, which is housed in Philadelphia, reversed a lower court decision, forcing the lower court to find out if the lease was defective or not. Writing for a 2-1 majority of a three judge panel, Circuit Judge Jane Richards Roth stated that Amazon’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.”
Do Customers Trust Amazon Alexa?
Despite recent privacy concerns along with concerns regarding third-party sellers, Amazon Echo is the most popular smart home platform, according to a study from ExpressVPN. About two-thirds of the survey’s respondents said they would most likely use Amazon Echo as opposed to Google Home at 55% and Facebook Portal at 11%. These survey results come in spite of Amazon’s many privacy scandals, the most recent being the fact that their employees listen to customers’ Alexa recordings in order to improve her artificial intelligence capabilities. It remains to be seen how the federal court’s ruling influences public opinion, and in turn, Amazon’s overall sales.