US regulators have ruled that Amazon is responsible for handling recalls of products sold on its site and must improve its process.
They said Amazon's alerts were not sufficient to convince its customers to stop using the products and ordered the company to submit a new plan for how it will respond.
The decision by the US Consumer Product Safety Commission (CPSC) came after the agency sued the e-commerce giant in 2021 for distributing more than 400,000 hazardous items, including faulty carbon monoxide detectors.
Amazon said it planned to appeal the finding, while defending its practices.
In the event of a recall, Amazon said it currently removes products from its site and notifies customers.
"We are disappointed by the CPSC’s decision. We plan to appeal the decision and look forward to presenting our case in court," the company said in a statement.
Amazon had long pushed back on claims it was liable for products sold on its platform.
In this case, which concerned products sold by third-party merchants and distributed using Amazon's shipping services, Amazon had disputed its responsibility as a "distributor" under the law, arguing that it was simply acting as an outside logistics provider.
But the commission said Amazon's role went beyond that of an ordinary shipping company when merchants used its "Fulfilled by Amazon" service, which handles the majority of sales on the platform.
For businesses enrolled in the programme, Amazon controls the return process, communicates with customers, enforces pricing rules and screens items for eligibility in its "Fulfilled by Amazon" programme, according to the commission's decision.
In this case, Amazon said it had removed the unsafe products identified in the complaint, which included the faulty carbon monoxide detectors, hairdryers without electrocution protection, and children’s pyjamas that did not meet flammability rules.
It said it had notified customers, instructed them to stop using the items and provided refunds.
But the commission said the steps were insufficient, noting that Amazon's messages failed to include terms like "recall" and supply other information.
Amazon "did not take adequate steps to encourage its customers to return or destroy them, thereby leaving consumers at substantial risk of injury," it said.
It ordered the company to submit a new proposal for how to respond.
In a statement, the commission said its decision was based on the facts of this particular case, while adding: "As with all agency decisions, companies may be interested in considering the applicability of the analysis in the decision to their own products and practices".
The ruling enters ongoing debate about what responsibility online platforms have for content on their site.
In 2020, a California appeals court found Amazon could be held liable for damages in a case involving a defective laptop battery sold on its site.
A year later, Amazon introduced a new product guarantee, which includes refunds and a process for resolving personal injury disputes.
"We stand behind the safety of every product in our store," the company said on Tuesday, adding that it had measures in place to prevent unsafe products and monitor listings.
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