The Consumer Product Safety Commission (CPSC) has ruled that Amazon must recall dangerous products sold on the platform, even if they are sold by third parties.
The regulator’s final decision, released last month, comes after a July 2024 ruling that classifies the e-commerce giant as a distributor under the Consumer Product Safety Act. As a distributor, Amazon bears a legal responsibility for recalling dangerous products and informing customers of those dangers.
That ruling stemmed from a lawsuit the CPSC filed against Amazon in 2021 over thousands of products it found unsafe. The products included children’s pajamas that failed to meet federal flammability standards, hair dryers that didn’t protect against electrocution in water, and faulty carbon monoxide detectors. More than 400,000 of the items were sold between 2018 and 2021.
Amazon’s “Fulfilled by Amazon” (FBA) program allows third-party sellers to list products on the site and store them at Amazon fulfillment centers. Amazon processes their payments, ships their orders, and facilitates customer service inquiries.
FBA sellers account for more than 60 percent of Amazon’s sales, which reached nearly $575 billion in 2023.
Most of the products deemed unsafe by the CPSC were made by small, foreign sellers who only used Amazon to sell their products because of how easy it was. Merchants can set up shop with little oversight.
Amazon actively recruits Chinese sellers, for example, to ensure that competing online marketplaces cannot offer as many products. But those goods don’t always meet U.S. safety standards. Companies whose products injure customers are outside U.S. jurisdiction and can simply disappear from Amazon.
After the CPSC alerted Amazon to the defective products, the company stopped selling them and offered customer refunds, but refused to collaborate on a safety recall.
In response to the CPSC lawsuit, Amazon argued that it was not liable for unsafe products because it acted simply as a “third-party logistics provider” for its FBA sellers.
However, the administrative law judge who issued last year’s ruling found that Amazon’s role in the FBA program qualified it as a distributor.
The CPSC said that Amazon’s customer notices sent in 2021 “downplayed the severity” of the dangers, only warning that products “may fail” to meet federal safety standards and only “potentially” posed risks.
Distributors are typically required to use the word “recall” in such notices; Amazon did not, choosing less alarming subject lines such as “Important safety notice about your past Amazon order.” The notices also did not include pictures of the affected items, a step required by law.
Amazon also put the onus on customers to destroy the products but didn’t require proof before sending a gift card. The company provided no way for customers to respond and, said the CPSC, “made no effort” to ensure each message had even been opened.
Amazon must now email any affected customers and post recall notices in their order history, incentivize them to destroy or dispose of the product, keep recall notices online for at least five years, and submit monthly progress reports to the CPSC.
Consumer advocates praised the CPSC’s decision.
“This order is about making sure Amazon is just as accountable as every other company that sells products to consumers who often think that if something is for sale, it must be safe,” said Teresa Murray, consumer watchdog director at U.S. Public Interest Research Group.
Consumers injured by dangerous or defective products can recover compensation by filing a product liability lawsuit. Such litigation can also encourage manufacturers to strengthen safety standards.
Products that are improperly manufactured, negligently designed, or on the market despite known dangers are grounds for a product liability lawsuit.
