An Eye for an Eye: US Federal Court’s ruling means that Amazon could be liable for products sold by third-party sellers

July 28, 2019

3 min read

Sign up to our mailing list! 👇

What's going on here?

The Third Circuit Court of Appeals in Philadelphia found by a majority 2-1 decision that Amazon had breached the Communications Decency Act 1996 and thus is liable for the product it sold on its platform that caused the customer to lose sight in one eye.

What does this mean?

Whilst walking her dog in January 2015, Heather Oberdorf was hit in the face by a D-ring that was attached to a retractable dog leash, having been ripped off a faulty dog collar. As a result, she suffered several injuries to her face including the permanent loss of sight in her left eye. The item was bought from a third-party seller on Amazon. As such, Mrs Oberdorf filed a lawsuit against both The Furry Gang (the collar manufacturer) and Amazon in June 2015. She has still not yet managed to contact The Furry Gang.

Amazon argued that unless a third-party seller takes part in the “Fulfillment by Amazon” program, which was not the case for The Furry Gang, Amazon has “no role in the selection of the goods to be sold” and consequently “any direct impact upon the manufacture of the products”. This defence is enshrined in Section 230 of the Communications Defence Act that protects online businesses from the legal consequences of content uploaded by their users.

However, the Third Circuit’s ruling found that Amazon was liable for “selling, inspecting, marketing, distributing, failing to test, or designing” the product, thus overturning the District Court of Pennsylvania’s initial ruling in favour of Amazon. The court noted that the Communications Defence Act means that Amazon is not responsible for warning consumers, but it has the power to remove “un-safe products” from its website and should do so. The fact that Amazon has previously allowed third-party sellers to “conceal themselves from the customer”, thereby protecting sellers whose products are defective, was a primary concern when the court delivered its judgment.

Why should law firms care?

The fact that Amazon is now liable for products sold by third-party sellers, on the grounds that it plays a large role in the sale process, is monumental. The duties on Amazon and other big tech companies have been drastically changed by the ruling. Amazon sources over half its products from third-party sellers, which in 2018 made up 58% of their physical gross merchandise sales. If the law now considers Amazon’s role as influential enough to be liable for these products, selling from third-party vendors will become much more complicated and expensive.

This has not been the first case to test the limits of the Communications Defence Act. Another case that has recently tested it concerned the dating app Grindr. The claimant had been victimised by his ex-boyfriend who set up multiple fake accounts that led more than 1000 men to the claimant’s office or home, expecting sex. Grindr was protected from the lawsuit by the Communications Defence Act on this occasion. But, following the Third Circuit’s ruling, it is now possible that Grindr would be liable. This could extend from tricky break-ups to inciting religious violence on online platforms, such as the New Zealand Mosque shootings that were broadcast live on Facebook.

There are many who, until this landmark ruling, believed that the Communications Defence Act had become a far too great a defence of big tech companies. Especially considering its initial remit which was simply to protect online bulletin boards from defamation lawsuits However, the expansive interpretation of the act has now been put to an end with this precedent.

What remains to be seen is whether or not Amazon make a successful appeal, or whether this new level of accountability is here to stay.

Report written by Will Holmes

If you’d like to write for LittleLaw, click here!

Share this now!

Check out our recent reports!