A California appeals courts ruled that Amazon can be held liable for defective products
sold on its marketplace. Legal journalist Mollye Barrows talks about that with me. Mollye,
this is so long overdue. Yes.
Okay. Amazon puts the product into the chain of commerce. Alright. As long as there's no
modification, no change to the product, there's a term called strict liability. You've put
it out there, you've stood behind it in terms of strict liability. It's killed somebody,
it's injured somebody and now the ninth circuit has says, you know, I don't think we're gonna
let Amazon get away with that anymore. That's exactly right. And this came out of
the appeals court in California. It's based around a San Diego woman who ordered a, basically
a replacement battery for her laptop through a third party seller on Amazon and when she
received the battery, it exploded. It gave her third degree burns, caused her serious
injuries, and she basically said, hey, I'm suing the manufacturer of this, the company
that I bought this from, as well as Amazon, because you were negligent in allowing this
product to be sold. And Amazon used the defense which it always uses because it's faced other
liability type lawsuits where they were being held responsible for damage or injuries that
somebody received from a third party seller, and Amazon said what they said in those cases,
which is, hey, yo, wait, we're not a seller. We're just providing you a platform to give
you buyers and consumers and sellers a place to interact and exchange your, you know, to
go through the selling process. Well, in this case, the court said, wait a second, Amazon,
you're in this every step of the way with this distribution process whether you want
to call yourself a distributor or a facilitator or a seller, or even a retailer, your behavior
is that of a seller. Yeah.
So you're responsibility? There's plenty, there's plenty of examples
of this with other companies over the years. I'm amazed that it's taken this long to tell
you the truth. Right.
But it had to be, I suppose it had to be the right case with the right facts situation.
Yes. But this is no different. I mean, if you listen
to what the distributors, for example, in the opioid case had to say, they say, well,
we just distributed it. We didn't do anything. We didn't make it.
We didn't know it was poisonous and addictive. We didn't have, we didn't have any idea what
was really going on, we just distributed it. And so Amazon wants to say the same thing.
That's right. They want to say, oh no, we're just putting
it out there. We're just a Craigslist.
No due diligence, at all. Right.
Isn't that part of the problem? That's exactly what the problem is. If you
go into Lowe's or Home Depot or any average retailer, if you will, and you buy a product
and it hurts you, they're just as responsible as the person who created the product, because
they're the re, the retailer, they've taken on that responsibility. That's the way our
laws work. And basically Amazon is not wanting to have that responsibility by saying, we're
not the seller. We're not to be held responsible. We don't have to go to this rigorous safety
process to make sure that this products safe, like your average retailer would have to do
that. So I imagine there's a lot of reasons Amazon doesn't want to, this is bad news for
Amazon, for a number of reasons. 60% of their business, they say now is coming from these
third party sellers. And people half the time when they go to Amazon, they don't know the
difference between Amazon marketplace, which is where you buy, you know, Amazon goods and
then the other part, which is where you buy from third party sellers. And there's a difference
between the two and I don't necessarily know. It's a, it's a big difference.
But there is big difference and that's what they're trying to say. We might be responsible
for the products that we sell, but we're not responsible for the products that these third
parties do, but they're involved in it every step of the way, of the selling process.
Well, actually now it's getting ready to get a little more monstrous because now, Amazon
is basically stealing the ideas of other manufacturers. In other words, they're able to keep up with
the metrics. How does this product sell? That's right.
It sells really well, so now we're going to go make that product that look, this is a
company that's closed down mom and pop stores all over the country.
Yes. Gobbled them up. That's not enough for them. Now they have
to, now they have to actually gobble up the people who are trying to do business with
them by saying, sell my product and they say, hey, I really like that. Amazon says we can
sell a lot of those based on our sales information. That's right. Well, and it's interesting you
bring that up because actually the court in this decision said as much, because they were
saying, hey, you want to claim that you're just a platform in providing the space for
the business to occur. You're not, you're behaving like a seller and here's part of
the reason why. You're basically using this data that you're getting from who's going
to buy what, and you're placing your ads where people are going to be inclined to buy this
particular product. So don't, you can't actively advertise it. You can't use the data that
you're collecting off people to know what's selling well and what isn't. You can't say
no, when you have a problem with the product, you can't go through the third party seller,
you've got to go through Amazon. They package it, they store it, they warehouse it. They
keep the seller from the buyer in many ways and so you can't have all that and say you're
not responsible. This, this case has potential to take Amazon
back to reality. This is a reality check for them, they better pay attention. Mollye, thank
you for joining me. Okay. Thanks Pap.