Amazon distributed hundreds of thousands of hazardous products sold by third-parties through the e-commerce giant’s platform, and is responsible for recalling them, a federal agency has ruled.
The U.S. Consumer Product Safety Commission on Tuesday issued a decision and order against Amazon, determining the retailer was a “distributor” of products that are defective or fail to meet federal safety standards.
The company, which rang up $574.8 billion in revenue in 2023, is legally responsible for the recall of more than 400,000 products, including faulty carbon monoxide detectors, hairdryers without electrocution protection and kids’ sleepwear that violates federal flammability standards, the agency said in a news release.
“Substantial” danger
Listed on Amazon.com and sold by third-parties using the Fulfilled by Amazon program, the items pose a “substantial product hazard” under the Consumer Product Safety Act, CPSC stated. Amazon failed to notify the public about the hazardous products and did not take adequate steps to encourage customers to return or destroy them, the agency said.
The CPSC’s decision and order come three years after the commission authorized an administrative complaint against Amazon that alleged it distributed certain products that pose a substantial hazard.
During the proceedings, Amazon did not contest the products present a substantial hazard, but it argued that it was not acting as a distributor and therefore was not responsible for taking action to protect the public.
The company also contended that sending messages to initial purchasers about “potential” safety issues and offering credits were sufficient to remedy the hazards, the commission said. It added that the agency as well as an administrative law judge disagreed with Amazon’s assertion, finding that the retailer’s actions were “inadequate to protect the public.”
Amazon must now submit proposed plans to notify people about the hazardous products and to remove them from circulation by incentivizing their return or destruction, the agency said.
Amazon said it was disappointed by the CPSC’s decision and plans to appeal the ruling in court.
“We stand behind the safety of every product in our store through our A-to-z Guarantee, regardless of whether it is sold by Amazon or by one of our selling partners,” a spokesperson told CBS MoneyWatch in an email. “We have proactive measures in place to prevent unsafe products, and we continuously monitor the listings in our store. If we discover an unsafe product available for sale, we address the issue immediately, and refine our processes.”
Amazon in 2022 invested more than $1.2 billion and employed more 15,000-plus people, from machine learning scientists and software developers to investigators, to protect against counterfeit, fraud and other abuses, the company noted.
Consumer advocates applaud order
The CPSC order “marks a major step forward for consumer protection online and helps hold online marketplaces accountable in the future,” said Oriene Shin, policy counsel for Consumer Reports.
Shin also called on Amazon to drop its legal battle with the CPSC, noting that the company had taken “positive steps for product safety in recent years.”
In July, the CPSC posted four recalls for products sold exclusively on Amazon, including children’s pajamas deemed a burn risk, a pool drain cover that violates entrapment protection standards, twin strollers that violate multiple safety regulations and area rugs that pose a fire hazard.
Kate Gibson is a reporter for CBS MoneyWatch in New York, where she covers business and consumer finance.
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