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Tue May 28 2019 00:09:34

Federal Judge Finds Amazon Model Troubling

By: Ina Steiner

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In reviewing a lawsuit involving an allegedly defective headlamp purchased from a third-party seller on Amazon, we were struck by the statements made by a Federal Circuit judge in her concurring opinion.

"By design, Amazon's business model cuts out the middlemen between manufacturers and consumers, reducing the friction that might keep foreign (or otherwise judgment-proof) manufacturers from putting dangerous products on the market," wrote Circuit Judge Diana Gribbon Motz.

Even more remarkable than indicating Amazon's model increases the chances that dangerous products could be sold (perhaps even flourish) on its marketplace, the judge went further, seeming to suggest that states should update their laws to put an end to what is in effect Amazon's loophole when it comes to product liability.

The case involved a product purchased on Amazon.com from a China-based seller who was using Fulfillment By Amazon - the headlamp allegedly played a role in a fire that burned down a couple's home. Amazon was found not liable - see details in EcommerceBytes Newsflash.

Should states change their laws to keep up with these "uniquely modern challenges," as the judge called them?

And should Amazon continue to proactively encourage foreign sellers to list through FBA without making them subject to the same kind of judgement US sellers would face in the case of property damage, injury, or death?



Comments (18) | Permalink

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This user has validated their user name. by: NoMoreEbay

Tue May 28 06:10:13 2019

Add the counterfeits and you're looking at a multi-billion dollar organized crime ring from Amazaon to ebay on down. The federal and local govt's need to wake up and hold these organizations liable.

It's the new mafia and has been going on for over a decade.

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by: sasikat9 This user has validated their user name.

Tue May 28 08:00:12 2019

And the clowns in Washington are to busy tossing each other under the bus to do anything. Typical government oversite.

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This user has validated their user name. by: Ina

Tue May 28 08:48:08 2019

These would be lawmakers at the state level. But would they have the political will given Amazon's economic clout ("job creator") in many states?

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by: Ebay Little Shop of Horrors This user has validated their user name.

Tue May 28 12:00:59 2019

Why is the middleman responsible for dangerous products in the US market?

Are you telling me that I can import lead-painted toys to sell on Amazon?

There's no gotcha at the pier? The states allow this- no inspecting goods from China?

Amazon has lost about 60% of its market. It's not a fad anymore. And those geniuses behind Amazon, (it's not Bezos), are now walking away.

When's the last time you saw a laptop carrier? The future is all phone, apps, and plenty of them, diversified.

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by: mjr55 This user has validated their user name.

Tue May 28 22:37:36 2019

Gee, maybe let Chinese sellers sell on their own damn country’s EBay and Amazon sites and don’t allow them to sell on the US sites. There would be a hundred different problems solved.

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by: ignatz This user has validated their user name.

Wed May 29 07:48:21 2019

@Ebay Little Shop of Horrors

Spot on.  

The judge's statement is based on a liability argument that doesn't stand up to scrutiny.

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by: purpleiris This user has validated their user name.
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Wed May 29 10:26:46 2019

I think these sites need to be held accountable for the things they allow to be sold on their site. Take, for example, the recent lawsuit filed against Etsy and its seller after a mother lost a child when strangled by a pacifier that was on a necklace. The U.S. has strict standards for baby products, but Etsy is not requiring its sellers to get the certification they're legally required to have.

So, Etsy is basically aiding and abetting in a crime. The same goes for Amazon, allowing sellers to sell dangerous products without any warranties. Imported products must also meet certain U.S. standards, so why aren't these Chinese (and other) sellers being held to those standards?

Just because it's in a site's terms that they're not liable, it doesn't mean it's ethical or even legal. It's just an excuse for them not to police what's being sold on their sites. If they don't want to be held accountable, then they need to be a lot more responsible with what they're allowing on their sites.

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by: hopeforthebest This user has validated their user name.

Wed May 29 11:11:23 2019

Ebay Little Shop of Horrors: Amazon has lost about 60% of its market....

Then:  The judge's statement is based on a liability argument that doesn't stand up to scrutiny.

Seriously? Must be a shock to the shareholders to see those amazing year over year increases after hearing this statement.

I am interested in hearing your deep legal analysis of this statement. :)

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by: mcposty This user has validated their user name.

Wed May 29 12:20:04 2019

This is the thing, Amazon, ebay etc all RUN YOUR BUSINESS for you, do everything, demand everything, but when there is a problem.." oh we are just a venue"

i don't think so!

Amazon, stores items long term in their warehouse, they are nothing like ups or usps. Amazon is a retailer just like walmart or home depot, end of story.


Now, I honestly do not feel a store itself shoudl be liable for manufacturer problems, unless it was the stores negligence that caused the harm.

But in the end, Amazon should not get out squeeky clean with this " we are just a venue" bull.

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by: Ebay Little Shop of Horrors This user has validated their user name.

Wed May 29 13:14:10 2019

Okay. About last year or so, Bezos gave a speech declaring that the site would dissolve; that  it was inevitable.  At the time, Amazon was still going gangbusters and I thought his remark was directed to Wenig. Ebay was dying and he was sneaking in a ''buddy, it's not you'' kinda thing.

Then, about the time Amazon raised their prime rate, all the people in my life who were in their twenties, wanted nothing to do with it.

These are young people who worshipped Amazon, bought everything from amazon; they were cool because they were Prime.

So I watch. Inhouse numbers are just that. You get a skilled lawyer and accountant together and they can make a ham sandwich look like Elon musk.

When Amazon went into New York it was because they were getting a gigantic break from taxes. People protested. They walked away.

But here was the part no one was talking about. The most important move. New York was to be the big Kahuna. They already employ 5000 in New York. This was headquarters, a mammoth gargantuan. Free from taxes.

But the part no one seemed to notice, was that they didnt find an alternative location.

I have a marketing background and there have been too many, a succession, of silly distractions. A girlfriend. White shirts protesting.

Is that what you meant? Or is the other people besides Bezos comment that you wanted me to expound on?



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by: Chicago48 This user has validated their user name.

Thu May 30 05:48:47 2019

Can the buyer sue through the World Trade Organization?  Seems there should be some outlet they can go to to get restitution.  Maybe the Insurance company that covered the house can do something.

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by: purpleiris This user has validated their user name.
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Thu May 30 11:31:44 2019

mcposty, you make some other good points. My thinking is that marketplaces gradually ''took over'' our businesses due to all of the problems being experienced, particularly on shoppers' ends. They wanted to have more control over transactions.

So, really, if we want to blame anyone, we should be blaming all the unscrupulous people in this world who choose to defraud others. If we want to solve that problem, then we can just round them all up and ship them off to Venus. LOL

Seriously, though, the stance these marketplaces are taking goes directly against the actions they're taking on their sites to take over their sellers' businesses. Either you own it and control it or you get out of my business.

Look at sites like Ruby Lane. They don't run their sellers' businesses, but they do make sure that sellers are offering genuine antiques -- and sellers pay a monthly fee to sell there. While Ruby Lane might not be anywhere near the size of Amazon or possibly even Etsy, they've done well.

That leads me to Amazon's and eBay's obvious desires to be the one and only place to go (particularly Amazon). They buy up their smaller competitors and either integrate, gradually disassemble, or quickly dissolve them (usually the latter). Anyone ever wonder why a former eBay exec is now running Etsy? Wouldn't you consider his actions a gradual disassembling of a once great site?

Combine that desire with the actions they're taking to control our businesses and you end up with a business model that is no longer mutually beneficial. At this point, Amazon is pretty much acting like a garage saler sourcing products to sell via its FBA program without any of the liability that goes with it. If something goes wrong while they try to grow bigger and bigger on the backs of hard-working sellers, it won't cost them much, if anything.

So, I find the judge's statements spot on, but there is so much more to the picture that she didn't even touch on. I know some of it doesn't apply to this particular case, but there are a lot of things that do. So, it would seem to me that lawmakers need an education when it comes to selling online -- and I don't mean that in a derogatory manner.

I know there are lawmakers who've actually stated in so many words that they want constituents to inform them because they can't do anything about something they know nothing about. The problem lies in the fact that very few constituents take the time to inform them.

Even when people like me try to make it easier for them to reach out to lawmakers, they don't take advantage of the opportunity. I won't even begin to speculate what goes through someone's mind that causes them not to take action by simply sending a letter to their congressmen, State Attorney General, etc.

I find it even more bewildering when people spend so much time publicly complaining to anyone who'll listen about all the injustices that only lawmakers can help them with. Yet, they won't take the time to actually write those lawmakers. Make the suggestion to them and they either suddenly get quiet or they completely ignore you and go on complaining.

So, who else is to blame? It would seem to me that we all are. The only question left to ask is who's going to be a part of the solution?

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by: GracefulAntiquesVtg This user has validated their user name.

Thu May 30 11:59:30 2019

So, I find the judge's statements spot on, but there is so much more to the picture that she didn't even touch on. I know some of it doesn't apply to this particular case, but there are a lot of things that do. So, it would seem to me that lawmakers need an education when it comes to selling online -- and I don't mean that in a derogatory manner.
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Purple Iris is correct. Official complaints to Atty. Generals where these States operate.
Issue is go take a peek at these States where these operate. Read the complaints and then do the math.
Things that make one go hmmm....
Feds will have to do something about all of this IMHO.
Whole long time chain stores are folding.
So we have the little sellers telling the mostly clueless State Atty. Generals. See the problem?
I could write a book and the long time sellers all could but it is so out there not sure anyone would believe it TBH. All I wanted to do was sell treasured Vintage and Antiques.
I wrote in the beginning I would stop when not having any fun anymore. Passed that a long time ago but the love for vintage is only thing that spurs me on.
I cringe when I think of the tons and tons of small sellers that depended on these sites just to make a little extra to feed their families. Met many dealers online over years and so many have physical issues. Just flat sad. Greed. Pure Greed.
Modern hippies that want to be real hippies.
Real hippies would be disgusted.
So much hankie pankie going on hiding our items and then demanding we pay here, there and everywhere.
How stupid do they think us Bad Citizens are?  

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by: Ebay Little Shop of Horrors This user has validated their user name.

Thu May 30 16:02:32 2019

Purple iris, I dont do that. When I was younger and I had a difficult situation, I called the governor's  office, but it had to be serious.

If I called my congressman every time I saw an injustice, I'd never get off the phone.

You have to pick your fights.

Ebay treats you as if you are already gone, because you are. They've been gearing up to compete with Walmart.

Here's what I imagine it's like to work at ebay:

The desk to the left of me is vacant. The desk to the right of me is vacant. My boss is so nervous you only have to blow on her door to get attention. Anything more than that and she'll jump through the roof.

I've got kids in private schools. Special needs. Ever think of my life?

All my smart friends left already and took all the jobs in the area. Maybe if I leave early, I can put in an application at Walmart and meet a manager......and you want my attention for what? Did you seriously think your invoices problem would be important to me? Got a pen? Write it in.

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by: purpleiris This user has validated their user name.
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Thu May 30 21:54:17 2019

"If I called my congressman every time I saw an injustice, I'd never get off the phone."

LOL You don't call the government on the phone -- you write them. Some states have procedures to file a complaint. Just go to you State Attorney General's website for the proper procedure for your state.

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by: Ebay Little Shop of Horrors This user has validated their user name.

Thu May 30 23:58:47 2019

''You write them.''?
In longhand? Do they still make white--out? How much is a stamp these days? I'll get right on that between the laundry and the yardwork.

I think you're answering the question you haven't realised you're asking. You need to be in public service.  You are the one who needs to be in the office that you want me to write to.

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by: Disgusted This user has validated their user name.

Fri May 31 16:06:16 2019

Companies in China that get caught selling crap-close shop that night and start another the next AM.  No big deall for them.  They laugh at USA and the laws.

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by: purpleiris This user has validated their user name.
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Fri Jun 7 01:48:13 2019

@ELSH...Actually, I would serve you well if I were in that office, thank you very much. LOL It sounds to me like you shouldn't be in business if you don't know how to properly do a business letter, especially considering you seemingly refuse to do one. It's all a part of doing business.

If you don't want to be a part of the solution, then nobody wants to hear you crying. We aren't the ones who are in a position to help you make the positive change I know you'd like to see.

Nobody ever said life was easy so do your laundry and yardwork and, instead of taking that hour or whatever to play games on the computer or spending however much time here complaining, why not use your business machine and write your congressmen and AG? It can be the exact same letter copied to all of them.



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