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An important and related fact, addressed in the article, is that Amazon currently escapes consumer product liability laws because they are neither seller nor ma

An important and related fact, addressed in the article, is that Amazon currently escapes consumer product liability laws because they are neither seller nor manufacturer. But they also cannot tell you with any degree of precision who the seller or manufacturer is. There is a public interest in making /someone/ liable for defective products, as it provides a incentive for sellers to do due diligence on what they sell. The party most able to root out sellers of defective or counterfeit goods is probably Amazon, but they currently have no incentive to do so as the liability is offloaded to judgement-proof Marketplace sellers. Amazon's business innovation here is figuring out how to run a multi billion dollar retail business without product liability, and that's negative for society.

wahern 5y ago
At least in California they are liable in tort: https://www.natlawreview.com/article/another-court-gets-hover-board-online-marketplace-liability-defective-products https://www.natlawreview.com/article/another-court-gets-hove... > California’s Court of Appeal (Second Appellate District) determined that Amazon could be held strictly liable for injuries a consumer suffered from a defective hoverboard she bought from the retailer, even though Amazon neither manufactured nor sold the product. > The plaintiff in this latest case, Kisha Loomis, bought a hoverboard through the Amazon marketplace. The Amazon marketplace carries both products sold by Amazon and by third parties. In this case, the hoverboard was sold by a Chinese company called SMILETO. > The Court of Appeal... [held] that a party who has control over and is integral to the chain of commerce, and receives a financial benefit from it, is strictly liable for injury caused by a product’s defects.
- Animats 5y ago
  Oh, that's important, and new. Here's the actual decision in Loomis vs. Amazon.[1] Amazon has been fighting that case since 2016, and last April, they lost at the appellate level in California. But the plaintiff hasn't won damages yet; the case will now be sent back to the LA Superior Court where discovery will continue; a trial date is expected to be set in 2022. So, in California, you can now make product liability claims against Amazon, despite their terms and conditions. [1] https://cases.justia.com/static/pdf-js/web/?file=/california/court-of-appeal/2021-b297995.pdf https://cases.justia.com/static/pdf-js/web/?file=/california...
- jimmaswell 5y ago
  So Wal Mart is liable for defective products in California too?
  - wahern 5y ago
    Yes, ever since the 1960s, actually. In fact, California was the first state[1] to adopt strict product liability. See https://en.wikipedia.org/wiki/Product_liability#Landmark_legal_cases https://en.wikipedia.org/wiki/Product_liability#Landmark_leg... Most U.S. states and many other countries have since adopted California's regime. So California courts extending their common law strict product liability doctrine to encompass Amazon's marketplace is quite a noteworthy precedent. [1] And the first jurisdiction globally, I think.
    - jimmaswell 5y ago
      Sounds like a big risk reselling anything with any potential to go wrong in California, or at least insurance premiums will be very high.
      - wahern 5y ago
        Not just in California, but in most of the U.S. and E.U. But if you weren't yourself negligent, you can recover your losses from an upstream supplier. In practice it's manufacturers or importers who bear most of the insurance cost. The whole point of the doctrine is that someone injured by a faulty product shouldn't have to hunt down the negligent party, who may have chosen to sell through a byzantine supply chain in order to protect themselves. Similarly, a downstream seller shouldn't be free to benefit from such an arrangement, either. IOW, retailers and other sellers should (and because of strict product liability do) have some responsibility to choose their suppliers wisely. Note that at least conceptually strict liability lessens the need for centralized product regulation. By making recovery for actual damages more efficient, there's less need for government to try to prevent negligence beforehand. And at least in theory that makes it easier for industry to innovate--to take calculated risks. Alas, the U.S. doesn't embrace this potential as well as it could.
bena 5y ago
So basically, Amazon is a large parking lot where they're charging a booth fee for the largest grey farmers' market in existence.
babypuncher 5y ago
I feel like the offloaded liability is just a technicality and is a poor lack of incentive for Amazon to do anything. Sure, the product was sold by a non-Amazon third party, but from the user perspective the defective product was purchased on Amazon. The company can deflect blame to the marketplace sellers all they want, but it's still Amazon's reputation that receives the most lasting damage.
- aidenn0 5y ago
  I am wondering if Amazon is immune to reputational damage though. People have been complaining about counterfeit and defective products from Amazon for about 5 years now, and it doesn't seem to have had significant effect on market share. I've been disentangling my purchasing habits from Amazon, but I don't know too many other people who are.
  - reportingsjr 5y ago
    I don't think the majority of people care about quality. I think most focus mainly on price. See Walmart for an example of this. They force manufacturers of otherwise decent stuff to make lower quality versions of products to sell only at Walmart, just to lower the end price. Considering that Walmart is one of the largest companies in the world, this seems to be a winning tactic.
    - oblio 5y ago
      People only care about quality for a very few select goods in their lives. Most of them are of hedonistic nature and/or are publicly visible so are a status symbol. Everything else will be as cheap as can be bought (so probably 90% of purchases).
    - justin_oaks 5y ago
      People are unable to accurately judge quality before they make a purchase, and often well after the purchase the quality is uncertain too. Who knows how long it'll take before you find out that your cheap USB charger was made of shoddy materials and will catch on fire when it fails? But you can know the exact price before the purchase. People are optimizing based on the information they have.

wahern 5y ago

At least in California they are liable in tort: https://www.natlawreview.com/article/another-court-gets-hover-board-online-marketplace-liability-defective-products https://www.natlawreview.com/article/another-court-gets-hove... > California’s Court of Appeal (Second Appellate District) determined that Amazon could be held strictly liable for injuries a consumer suffered from a defective hoverboard she bought from the retailer, even though Amazon neither manufactured nor sold the product. > The plaintiff in this latest case, Kisha Loomis, bought a hoverboard through the Amazon marketplace. The Amazon marketplace carries both products sold by Amazon and by third parties. In this case, the hoverboard was sold by a Chinese company called SMILETO. > The Court of Appeal... [held] that a party who has control over and is integral to the chain of commerce, and receives a financial benefit from it, is strictly liable for injury caused by a product’s defects.

Animats 5y ago
Oh, that's important, and new. Here's the actual decision in Loomis vs. Amazon.[1] Amazon has been fighting that case since 2016, and last April, they lost at the appellate level in California. But the plaintiff hasn't won damages yet; the case will now be sent back to the LA Superior Court where discovery will continue; a trial date is expected to be set in 2022. So, in California, you can now make product liability claims against Amazon, despite their terms and conditions. [1] https://cases.justia.com/static/pdf-js/web/?file=/california/court-of-appeal/2021-b297995.pdf https://cases.justia.com/static/pdf-js/web/?file=/california...
jimmaswell 5y ago
So Wal Mart is liable for defective products in California too?
- wahern 5y ago
  Yes, ever since the 1960s, actually. In fact, California was the first state[1] to adopt strict product liability. See https://en.wikipedia.org/wiki/Product_liability#Landmark_legal_cases https://en.wikipedia.org/wiki/Product_liability#Landmark_leg... Most U.S. states and many other countries have since adopted California's regime. So California courts extending their common law strict product liability doctrine to encompass Amazon's marketplace is quite a noteworthy precedent. [1] And the first jurisdiction globally, I think.
  - jimmaswell 5y ago
    Sounds like a big risk reselling anything with any potential to go wrong in California, or at least insurance premiums will be very high.
    - wahern 5y ago
      Not just in California, but in most of the U.S. and E.U. But if you weren't yourself negligent, you can recover your losses from an upstream supplier. In practice it's manufacturers or importers who bear most of the insurance cost. The whole point of the doctrine is that someone injured by a faulty product shouldn't have to hunt down the negligent party, who may have chosen to sell through a byzantine supply chain in order to protect themselves. Similarly, a downstream seller shouldn't be free to benefit from such an arrangement, either. IOW, retailers and other sellers should (and because of strict product liability do) have some responsibility to choose their suppliers wisely. Note that at least conceptually strict liability lessens the need for centralized product regulation. By making recovery for actual damages more efficient, there's less need for government to try to prevent negligence beforehand. And at least in theory that makes it easier for industry to innovate--to take calculated risks. Alas, the U.S. doesn't embrace this potential as well as it could.

bena 5y ago

So basically, Amazon is a large parking lot where they're charging a booth fee for the largest grey farmers' market in existence.

babypuncher 5y ago

I feel like the offloaded liability is just a technicality and is a poor lack of incentive for Amazon to do anything. Sure, the product was sold by a non-Amazon third party, but from the user perspective the defective product was purchased on Amazon. The company can deflect blame to the marketplace sellers all they want, but it's still Amazon's reputation that receives the most lasting damage.

aidenn0 5y ago
I am wondering if Amazon is immune to reputational damage though. People have been complaining about counterfeit and defective products from Amazon for about 5 years now, and it doesn't seem to have had significant effect on market share. I've been disentangling my purchasing habits from Amazon, but I don't know too many other people who are.
- reportingsjr 5y ago
  I don't think the majority of people care about quality. I think most focus mainly on price. See Walmart for an example of this. They force manufacturers of otherwise decent stuff to make lower quality versions of products to sell only at Walmart, just to lower the end price. Considering that Walmart is one of the largest companies in the world, this seems to be a winning tactic.
  - oblio 5y ago
    People only care about quality for a very few select goods in their lives. Most of them are of hedonistic nature and/or are publicly visible so are a status symbol. Everything else will be as cheap as can be bought (so probably 90% of purchases).
  - justin_oaks 5y ago
    People are unable to accurately judge quality before they make a purchase, and often well after the purchase the quality is uncertain too. Who knows how long it'll take before you find out that your cheap USB charger was made of shoddy materials and will catch on fire when it fails? But you can know the exact price before the purchase. People are optimizing based on the information they have.