According to a Wall Street Journal investigation published on Friday, thousands of items for sale on Amazon “have been declared unsafe by federal agencies, are deceptively labeled or are banned by federal regulators.”
For the millions of people who shop on Amazon.com, it is assumed the goods being sold to them are safe and not illegal in any way. The reality is somewhat different. Amazon has increasingly evolved like a flea market. It exercises limited oversight over items listed by millions of third-party sellers, many of them anonymous, many in China, and many of them offering little if any information about their products.
Amazon’s third-party sales have surged – growing from $0.1 billion in 1999 to $160 billion in 2018 according to the numbers Jeff Bezos released recently, according to PC Magazine.
As a matter of fact, in an April 2019 share-holder letter, Bezos said: “Third-party sellers are kicking our first-party butt. Badly. And it’s a high bar too because our first-party business has grown dramatically over that period, from $1.6 billion in 1999 to $117 billion this past year.”
Limited oversight of third-party sellers
While Amazon has created any number of programs that are attuned to helping third-party sellers become successful, including “tools that help sellers manage inventory, process payments, track shipments, create reports, and sell across borders,” when it comes to product liability lawsuits stemming from these third-party sales, Amazon’s strategy has been to distance itself and disclaim responsibility.
And that is a problem that is starting to crop up enough that members of Congress are getting curious and asking some tough questions. There is a growing list of congressional inquiries into the Seattle-based commerce giant, which, like other enormous tech platforms, is under increased government scrutiny.
Senators Richard Blumenthal, Conn., Robert Menendez, N.J., and Edward Markey, Massachusetts, all members of the Senate Commerce Committee, wrote a letter to Bezos – asking for a response to a series of questions about Amazon’s business practices by September 29, 2019.
“Unquestionably, Amazon is falling short of its commitment to keeping safe those consumers who use its massive platform,” the senators wrote. They also want Bezos to explain what the company is doing to prevent third-party sellers from selling dangerous, illegal and misleading products on its platform, and called on him to undertake “a sweeping internal investigation of your enforcement and consumer-safety policies.”
All this being said – Amazon is still smiling like the cat that swallowed the canary. When asked about the senator’s letter, Amazon cited a response to the Wall Street Journal story. In that statement, the company described safety as “a top priority” and said it had spent $400 million on product safety and compliance in 2018.
Strangely enough, after both Washington state and Journal investigations, unsafe or mislabeled products brought to Amazon’s attention were removed but later reappeared for sale.
In the letter, senators cited magnetic toys that Amazon had restricted for sale in 2012, and which were declared a “substantial product hazard” by the Consumer Product Safety Commission. As part of the Wall Street Journal report, some 80 listings for the dangerous magnetic toys – which, if swallowed, can snap together causing internal organ damage—were still for sale by third-parties on Amazon.
The really disgusting result of these investigations is that when hit with a lawsuit over an illegal product being sold on their website, Amazon argues that in lawsuits stemming from the sale of faulty products by third-party sellers, that it is not liable because it isn’t actually the seller.
