Amazon Settles $1.2M Lawsuit: Product Liability and the Risks of Online Purchases

The world of e-commerce has revolutionized how we shop, offering unparalleled convenience and access to a global marketplace. However, this convenience comes with inherent risks, particularly when it comes to product safety and liability. A recent settlement involving Amazon highlights these risks and raises important questions about the responsibility of online marketplaces for defective products sold on their platforms. In a case that garnered significant attention, Amazon settled a lawsuit for $1.2 million, involving a product liability claim stemming from an allegedly defective product purchased on its site. This settlement underscores the growing legal complexities and potential financial repercussions associated with online purchases.

The Rise of E-Commerce and Product Liability

E-commerce has exploded in recent years, with Amazon leading the charge as the largest online retailer, processing approximately $1.4 billion in consumer sales each day. This surge in online shopping has created a complex web of product liability issues, as consumers increasingly purchase goods from third-party sellers through platforms like Amazon, eBay, and Walmart. While e-commerce offers numerous benefits, it also introduces challenges in determining who is responsible when a defective product causes harm.

Product liability law traditionally holds manufacturers, distributors, and retailers accountable for injuries caused by defective or dangerous products. These laws generally fall under three categories:

Design Defects: Issues with the inherent design of a product that make it unreasonably dangerous.
Manufacturing Defects: Flaws that occur during the production process, leading to a finished product that causes harm.
Marketing Defects: Inadequate instructions or labels that fail to inform consumers about a product’s proper use or potential risks.

In the traditional retail model, liability often falls on the manufacturer or the retailer that sold the product directly to the consumer. However, the online marketplace model complicates this framework, as platforms often act as intermediaries between consumers and third-party sellers. This raises the question of whether these platforms should be held liable for defective products sold through their sites.

The Legal Landscape: Amazon’s Evolving Role

For years, Amazon has maintained that it is merely a platform connecting buyers and sellers, not a seller itself. This position has shielded it from liability in many product defect cases, leaving injured consumers with limited options, especially when the manufacturer is an overseas company. Amazon has argued that third-party vendors list and sell products, while Amazon only facilitates the transaction, processes payment, and ships the item. Because Amazon does not purchase and resell products like traditional retailers, it claims it should not be liable for defects.

However, courts around the country have begun to push back against Amazon’s “not a seller” defense. Recent legal developments suggest a shift toward increased accountability for online marketplaces.

Oberdorf v. Amazon: A federal court held that Amazon could face product liability claims for injuries caused by an item sold by a third-party vendor. Amazon later settled the case without admitting any wrongdoing.
Bolger v. Amazon: A California appellate court ruled that Amazon could be considered a seller and therefore liable for injuries caused by a defective laptop battery sold by a third-party vendor. The court reasoned that Amazon played an integral role in the transaction, including processing payment and storing and shipping the product.
Loomis v. Amazon: The California Court of Appeal found Amazon to be strictly liable for injuries resulting from a defective hoverboard sold by a third-party seller on its platform, as Amazon had control over and was integral to the chain of commerce and received a financial benefit from it.
Pickard v. Amazon.com, Inc.: The Louisiana Supreme Court ruled that Amazon counts as a “seller” under that state’s product liability laws when it comes to defective third-party products sold on its website and can be held responsible if it acted negligently in handling those sales.
Johnson v. Amazon.com, Inc.: The United States District Court for the Southern District of Texas determined Amazon can be held responsible for injuries caused by faulty products sold on its platform, even if Amazon was not the direct seller.

These cases indicate a growing trend of courts scrutinizing the role Amazon plays in the sale, shipment, and marketing of products. Because Amazon’s corporate ties are in Washington, many of these cases can be filed in Seattle—even if the injured person lives in another state.

Risks of Online Purchases

Shopping online offers undeniable convenience, but it’s crucial to be aware of the potential risks involved. These risks extend beyond product defects and encompass various aspects of online security and consumer protection.

Defective Products: As highlighted by the Amazon settlement, defective products pose a significant risk to consumers. These products can cause injuries, property damage, and even death.
Identity Theft: Cybercriminals can hack into e-commerce websites and steal users’ login or credit card details, enabling them to make fraudulent purchases or sell personal details to other criminals.
Fake Online Stores: Scammers may set up fake websites designed to look like established, genuine retailers, copying designs and layouts and stealing logos to trick unsuspecting users.
Unencrypted Data: When you shop online, you share sensitive information with retailers, including your bank or credit card details, contact information, and address. If the website does not have proper encryption, this information could be intercepted by hackers.
Data Breaches: If hackers gain unauthorized access to an e-commerce website, there is a risk that your information could be exposed in the event of a data breach.
Fake Reviews: Many online shoppers read reviews before they buy. However, not all online reviews are genuine. Retailers sometimes have a pattern of reviews that seem too good to be true or lack detail.
Fake Apps: Cybercriminals sometimes try to mimic genuine online retailers by creating fake versions of their apps to harvest your personal information, such as bank or credit card details, plus usernames and passwords.
Unsecured Wi-Fi: Unsecured Wi-Fi in public places can carry security risks. If you carry out online shopping transactions on an unsecured Wi-Fi network, there is a risk that hackers could obtain the personal information you submit, such as your credit card details and contact information.
Phishing: Phishing is a form of cyberattack that leverages disguised email to steal from unsuspecting Internet users. The objective is to mislead email recipients into thinking the message is from reputable companies and encourage them to divulge sensitive personal data like credit card details and passwords.
Adware and Malware: While browsing social media platforms or e-commerce stores, attractive ads and offers pop up on the screens of users. These ads are not legitimate most of the time and may redirect users to sites where they are required to sign up and provide their personal information.

Protecting Yourself: Tips for Safe Online Shopping

While the risks of online shopping are real, there are several steps you can take to protect yourself and minimize your exposure to potential harm.

Buy from Trusted, Secure Sites Only: Stick to reputable retailers with verified reviews and a secure (HTTPS) connection. Amazon and all the major retailer sites are, for the most part, a safe bet.
Check the SSL Certificate: Look for “HTTPS” in the URL and a padlock icon in the address bar, indicating a secure connection.
Look for a Privacy Statement: Ensure the website has a clear privacy policy outlining how your data is collected and used.
Use a Secure Internet Connection: Avoid making purchases over public Wi-Fi whenever possible, as bad actors can intercept your connection and access your information.
Use Strong, Unique Passwords: Create complex passwords for your different accounts and avoid reusing passwords across multiple sites.
Enable Two-Factor Authentication: Add an extra layer of security to your accounts by enabling two-factor authentication whenever possible.
Only Submit Information You Absolutely Have To: Be wary of websites that ask for excessive personal information.
Avoid Using an Important Email Account: Use a dedicated email address for online shopping to minimize the risk of your primary email account being compromised.
Use a Credit Card with Fraud Protection: Only use a credit card that has fraud protection to make your purchase. If you use a debit card and your information is compromised, the hacker would have direct access to your entire bank account.
Get a Temporary Credit Card: Ask your credit card company if you can be issued a temporary credit card number for a one-time purchase.
Monitor Your Accounts Regularly: Keep a record of all your transactions and check your statements for unfamiliar activity regularly.
Be Wary of Deals That Seem Too Good to Be True: If it seems “too good to be true,” it probably is.
Look for an Address and Phone Number: Ensure the website provides contact information, including a physical address and phone number.
Look Out for Spelling and Grammar Mistakes: Be wary of websites with poor grammar or spelling errors, as these can be signs of a scam.
Read Online Reviews: Check online reviews of the retailer and the product before making a purchase.
Keep Software Updated: Make sure your computer and mobile devices have the latest security updates and antivirus software installed.
Report Suspicious Activity: If you suspect fraud or identity theft, report it to the Federal Trade Commission (FTC) and your local law enforcement agency.

What To Do If You’re Injured by a Defective Product Purchased Online

If you have been injured by a defective product purchased online, it is crucial to take the following steps to protect your health and legal rights:

Seek Medical Attention: Your health and safety are paramount. Seek medical care right away and follow your doctor’s instructions.
Preserve Evidence: Keep the product, packaging, instructions, order confirmation, and any receipts.
Document Your Injuries: Take photos and document your symptoms and the recovery process.
Avoid Direct Contact with Amazon or the “Partner Seller”: This can sometimes make matters more complicated.
Contact an Attorney: Consult with an attorney who specializes in product liability cases and has experience with Amazon claims.
Report the Incident: Report the product to the marketplace to have it removed from sale to prevent future injuries.
File a Claim: Your attorney can help you file a product liability claim against the responsible parties, including the manufacturer, distributor, and potentially Amazon.

Navigating the Complexities of Online Product Liability

The Amazon settlement serves as a stark reminder of the risks associated with online purchases and the importance of holding online marketplaces accountable for the products sold on their platforms. As e-commerce continues to evolve, it is crucial for consumers to be aware of their rights and take steps to protect themselves from potential harm. By understanding the legal landscape, recognizing the risks, and following safety tips, consumers can navigate the complexities of online shopping with greater confidence and security.

If you or a loved one has been injured by a defective product purchased online, it is essential to seek legal guidance from an experienced product liability attorney. A qualified attorney can help you understand your rights, navigate the legal process, and pursue the compensation you deserve.