https://www.cnbc.com/2024/07/30/cpsc-says-amazon-responsible-for-faulty-goods-sold-on-its-marketplace.html Skip Navigation logo * watchlive logo Markets * Pre-Markets * U.S. Markets * Currencies * Cryptocurrency * Futures & Commodities * Bonds * Funds & ETFs Business * Economy * Finance * Health & Science * Media * Real Estate * Energy * Climate * Transportation * Industrials * Retail * Wealth * Sports * Life * Small Business Investing * Personal Finance * Fintech * Financial Advisors * Options Action * ETF Street * Buffett Archive * Earnings * Trader Talk Tech * Cybersecurity * Enterprise * Internet * Media * Mobile * Social Media * CNBC Disruptor 50 * Tech Guide Politics * White House * Policy * Defense * Congress * Equity and Opportunity CNBC TV * Live TV * Live Audio * Business Day Shows * Entertainment Shows * Full Episodes * Latest Video * Top Video * CEO Interviews * CNBC Documentaries * CNBC Podcasts * CNBC World * Digital Originals * Live TV Schedule Watchlist * Trust Portfolio * Analysis * Trade Alerts * Meeting Videos * Homestretch * Jim's Columns * Education * Subscribe * Sign In * Pro News * Pro Live * Full Episodes * Stock Screener * Market Forecast * Options Investing * Chart Investing * Subscribe * Sign In Menu * Make It * select + ALL SELECT + Credit Cards + Loans + Banking + Mortgages + Insurance + Credit Monitoring + Personal Finance + Small Business + Taxes + Help for Low Credit Scores + Investing + SELECT + All Credit Cards + Find the Credit Card for You + Best Credit Cards + Best Rewards Credit Cards + Best Travel Credit Cards + Best 0% APR Credit Cards + Best Balance Transfer Credit Cards + Best Cash Back Credit Cards + Best Credit Card Welcome Bonuses + Best Credit Cards to Build Credit + SELECT + All Loans + Find the Best Personal Loan for You + Best Personal Loans + Best Debt Consolidation Loans + Best Loans to Refinance Credit Card Debt + Best Loans with Fast Funding + Best Small Personal Loans + Best Large Personal Loans + Best Personal Loans to Apply Online + Best Student Loan Refinance + SELECT + All Banking + Find the Savings Account for You + Best High Yield Savings Accounts + Best Big Bank Savings Accounts + Best Big Bank Checking Accounts + Best No Fee Checking Accounts + No Overdraft Fee Checking Accounts + Best Checking Account Bonuses + Best Money Market Accounts + Best CDs + Best Credit Unions + SELECT + All Mortgages + Best Mortgages + Best Mortgages for Small Down Payment + Best Mortgages for No Down Payment + Best Mortgages with No Origination Fee + Best Mortgages for Average Credit Score + Adjustable Rate Mortgages + Affording a Mortgage + SELECT + All Insurance + Best Life Insurance + Best Homeowners Insurance + Best Renters Insurance + Best Car Insurance + Travel Insurance + SELECT + All Credit Monitoring + Best Credit Monitoring Services + Best Identity Theft Protection + How to Boost Your Credit Score + Credit Repair Services + SELECT + All Personal Finance + Best Budgeting Apps + Best Expense Tracker Apps + Best Money Transfer Apps + Best Resale Apps and Sites + Buy Now Pay Later (BNPL) Apps + Best Debt Relief + SELECT + All Small Business + Best Small Business Savings Accounts + Best Small Business Checking Accounts + Best Credit Cards for Small Business + Best Small Business Loans + Best Tax Software for Small Business + SELECT + All Taxes + Filing For Free + Best Tax Software + Best Tax Software for Small Businesses + Tax Refunds + Tax Brackets + Tax Tips + Tax By State + Tax Payment Plans + SELECT + All Help for Low Credit Scores + Best Credit Cards for Bad Credit + Best Personal Loans for Bad Credit + Best Debt Consolidation Loans for Bad Credit + Personal Loans if You Don't Have Credit + Best Credit Cards for Building Credit + Personal Loans for 580 Credit Score or Lower + Personal Loans for 670 Credit Score or Lower + Best Mortgages for Bad Credit + Best Hardship Loans + How to Boost Your Credit Score + SELECT + All Investing + Best IRA Accounts + Best Roth IRA Accounts + Best Investing Apps + Best Free Stock Trading Platforms + Best Robo-Advisors + Index Funds + Mutual Funds + ETFs + Bonds * USA * INTL * watchlive Search quotes, news & videos Watchlist SIGN IN logo Markets Business Investing Tech Politics CNBC TV Watchlist Menu Tech Federal regulator says Amazon can be held responsible for faulty goods sold on its marketplace Published Tue, Jul 30 202410:22 AM EDTUpdated Moments Ago thumbnail Annie Palmer@in/annierpalmer/ WATCH LIVE Key Points * In a landmark order, the U.S. Consumer Product Safety Commission said the agency unanimously agreed Amazon "fits squarely" within the definition of a distributor of goods and bears responsibility for the recall of faulty products. * The decision addresses a thorny issue faced by Amazon for years, with the company arguing it's merely a conduit between third-party sellers and shoppers. * A judge said Amazon's fulfillment program for sellers give it "far-reaching control" over the products sold on its platform. In this article * AMZN Follow your favorite stocksCREATE FREE ACCOUNT Packages move along a conveyor belt at an Amazon Fulfillment center on Cyber Monday in Robbinsville, New Jersey, on Nov. 28, 2022. Stephanie Keith | Bloomberg | Getty Images Federal regulators have determined that Amazon can be held responsible for defective goods sold by third-party merchants on its online marketplace, rejecting the company's position that it's merely an intermediary between consumers and sellers. In a landmark order released Tuesday, the U.S. Consumer Product Safety Commission said the agency unanimously agreed Amazon "fits squarely" within the definition of a distributor of goods, "and therefore bears legal responsibility for their recall." As part of the agency's decision, Amazon is required to develop a plan to notify purchasers and the public about the product hazards, as well as offer shoppers refunds or replacements for the affected products. Amazon's marketplace, which hosts millions of third-party sellers, now accounts for approximately 60% of the company's e-commerce sales. While the marketplace has helped Amazon bring in record revenue, it has also proven to host counterfeit, unsafe and even expired goods. The company has previously said it invests hundreds of millions of dollars per year to ensure products sold are safe and compliant. The decision addresses a thorny issue that's been debated for years. In numerous lawsuits, Amazon has maintained it just serves as the conduit between buyers and sellers on its marketplace and that it's not involved in the sourcing or distribution of products sold by third-party sellers, removing it from liability. That has been a successful defense for Amazon in the past, including in a 2018 case concerning the purchase of a faulty hoverboard that exploded and burned down an Amazon shopper's house in Tennessee. In other cases, federal courts and legislators have said the e-commerce giant should be held liable. In 2021, the CPSC sued Amazon to force it to recall hundreds of thousands of products that it deemed hazardous. At issue were 418,818 goods sold through Amazon, including faulty carbon monoxide detectors, hairdryers without electrocution protection and children's sleepwear that posed a burn risk. Amazon argued in its response to the agency complaint that it should be characterized as a third-party logistics provider, saying it only receives and transports the products sold through its site. Still, Amazon removed all the products flagged by the CPSC and prohibited merchants from selling them on its marketplace. The company informed shoppers who purchased the items of "potential safety issues," told them to destroy the items and offered a credit. The CPSC called these actions "inadequate," saying the company should've offered refunds to incentivize consumers to destroy or return the product. In Tuesday's ruling, the agency said an administrative law judge dismissed Amazon's argument that it should be classified as a third-party logistics provider. The judge pointed to Amazon's Fulfilled by Amazon service, where sellers ship inventory into the company's warehouses, and those products are stored until they're purchased. This program gives Amazon "far-reaching control" over the products sold on its platform, the judge said. "Amazon cannot sidestep its obligations under the [Consumer Product Safety Act] simply because some portion of its extensive services involve logistics," the decision states. "Amazon must therefore comply with the CPSA to protect consumers from injury." An Amazon spokesperson said in a statement that the company is "disappointed" by the CPSC's decision and plans to appeal. They added that Amazon stands behind the safety of every product in its store, regardless of whether it's sold by the company our a third-party seller. If a product is recalled, Amazon removes them from its platform and informs shoppers of any product safety information, the spokesperson said. In 2021, the company updated its returns policy to allow shoppers to contact Amazon directly with any complaints of faulty goods, rather than communicating with the third-party merchant. 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