As the pandemic nudges more shopping into the online world, the legal questions of how ecommerce is treated become even more important.
The novel coronavirus caused a $107 billion increase in online shopping sales so far this year, according to Adobe Analytics. Between August 2019 and August 2020, ecommerce sales jumped 42 percent in the U.S.
But some consumer advocates worry that large e-tailers like Amazon and Walmart will argue they are exempt from the protections that the law usually affords.
“They have basically served as a conduit for cheap products made overseas,” says Will Ourand, attorney with Newsome Melton. “They’ve opened the floodgates for dangerous and defective products. Amazon is making money bringing these defective products into the U.S. and turning their backs when consumers get hurt.”
Department stores, mall boutiques and Main Street Mom-and-Pop shops are subject to product liability laws, which vary by state. The concept of the laws, Ourand says, is to shield both consumers and the public health system, from paying the costs of injuries from defective products. The liability applies to everyone in the distribution chain. “The risk of loss falls on the companies that make a profit off the product,” Ourand says.
But Amazon has argued that it’s exempt because it is connecting buyers with sellers, not providing traditional sales. Amazon makes the claim even when the product is shipped from its own warehouses, instead of from the seller, Ourand points out. The argument is similar to those made by other types of web companies, such as ride sharing services who say they are an app connecting riders and drivers and not a transportation service.
“To claim they are not in the chain of distribution like any other storefront is ridiculous,” Ourand says. “They are providing the same service but they are trying to duck out on all liabilities. It’s not fair to other businesses – it’s giving Amazon and Walmart.com a leg up.”
Consumers can still sue the sellers and manufacturers, but that’s often difficult if they are in countries like China with fewer consumer protections. Finding the companies and serving legal papers can be difficult, as can enforcing judgments from U.S. courts.
One defense strategy e-commerce companies have used is citing Section 230 of the Communications Decency Act of 1996, which protects social media sites and bloggers from lawsuits spurred by content put on the website by others.
Amazon has had some success in court arguing that product liability doesn’t apply to the company. But several recent cases show that courts are seeing through Amazon’s defenses, marking a great trend for consumers. In August, Angela Bolger successfully argued to the 4th District Court of Appeal in California that Amazon could have exerted influence on product safety. Bolger was burned and needed a skin graft after a replacement battery she had bought on Amazon caught fire in her lap and caused a blaze in her apartment. “But for Amazon’s own acts, Bolger would not have been injured. Amazon’s own acts, and its control over the product in question forms the basis for its liability.”
Amazon spokeswoman Cecilia Fan said the company will appeal, according to the Washington Post.
In another loss, Amazon failed to get a Texas case dismissed when a federal judge said the company could be held liable for a defective product. In that case, Morgan McMillan’s 19-month daughter swallowed a battery from a television remote that allegedly didn’t have adequate childproofing.
Both decisions are likely to be looked at by other plaintiffs as courts sort out the responsibilities of online sellers.
If you have questions about this topic or need assistance filing a product liability claim, Newsome Melton can help. Contact us at 1-888-380-2809.