Is your company selling products through the Amazon.com platform, as a third party seller?

Some new policies regarding product compliance are probably coming up very soon.

The US agency in charge of protecting consumers’ safety just published an important ruling: CPSC Finds Amazon Responsible Under Federal Safety Law for Hazardous Products Sold by Third-Party Sellers on Amazon.com.

Basically, Amazon had been pretending that consumers know very well that certain products are not sold by Amazon, and it means Amazon can’t be held to the same standard as, for example, a Walmart store. They pretend they just take care of logistics… And that defence was just not very convincing.

Well, now they are ordered to proceed to product withdrawals from the market in a public manner. For products that had been sold by so-called third party merchants on the Amazon platform.

This decision was a few years in the making. In 2001, here is the start of the CPSC’s case to make Amazon responsible as the distributor of all products sold in the USA on Amazon websites:

The named products include 24,000 faulty carbon monoxide detectors that fail to alarm, numerous children’s sleepwear garments that are in violation of the flammable fabric safety standard risking burn injuries to children, and nearly 400,000 hair dryers sold without the required immersion protection devices that protect consumers against shock and electrocution.

In the ruling that was published today, the agency writes:

Amazon did not contest that the products present a substantial product hazard. Instead, Amazon argued that it was not acting as a distributor of the hazardous products within the meaning of the [Consumer Product Safety Act], and therefore was not responsible for taking actions to protect the public.  The [Administrative Law Judge] rejected Amazon’s argument, holding that Amazon acted as a distributor in this matter. The Commission affirmed that holding in today’s decision.

In the case of the blatantly unsafe products that were the basis of the agency’s case, a product recall is on the way:

Amazon must now develop and submit proposed plans to notify purchasers and the public about the product hazards, and to provide refunds or replacements for these products.  Notice to the public is important so that people who may have received one of the products as a gift or purchased it second-hand can learn about the hazards.

And what is all this going to mean for third party sellers?

They have already been requested to provide certain information to Amazon, especially in product categories seen as risky. The focus was on evidence of testing, and more generally evidence that compliance requirements were taken in consideration.

What will the process look like in, say, 6 months?

Will the requests for evidence of compliance be more stringent? Probably, yes.

Will sellers be requested to provide risk assessment reports for each product and to pay a consulting firm for their review? Maybe, in certain categories.

Will sellers have to maintain a presence in the USA, either themselves or through a USA authorized representative? That’s quite possible, too, as is already required by the European Union.

Will this lead to the eviction of most Chinese sellers from Amazon.com?

Oh, and will consumers start class action lawsuits on products sold through Amazon.com over the past few years?

Let’s see where all this goes. I don’t expect Amazon to be able to appeal this decision, so the question is, what is Amazon’s reaction going to be?