The U.S. Consumer Product Safety Commission (CPSC) has ruled that Amazon is responsible for recalling hundreds of thousands of hazardous products sold by third-party sellers on its platform.

As part of this ruling, Amazon is required to submit a plan to notify customers about these hazardous products and incentivize their return or destruction.

This decision follows a CPSC lawsuit against Amazon initiated in July 2021, which focused on defective carbon monoxide detectors, unsafe hair dryers, and non-compliant children's sleepwear.

An administrative law judge ruled that Amazon acted as a distributor for third-party goods, undermining the company's claims of limited responsibility.

The CPSC criticized Amazon for failing to adequately inform the public about these hazardous products, putting consumers at significant risk.

After the CPSC's findings, Amazon informed customers of potential hazards but argued it was not legally responsible for product recalls, claiming to act solely as a logistics provider.

In response to the ruling, Amazon expressed disappointment and plans to appeal, asserting that it has taken steps to notify customers about safety issues.

Despite the ruling, Amazon maintains that it has measures in place to prevent unsafe products from being sold and continuously monitors its listings.

Amazon's marketplace heavily relies on independent sellers, accounting for over 60% of its sales, complicating the liability issue surrounding defective products.

This ruling could significantly affect how Amazon expands and oversees its marketplace operations in the future.

The ruling specifically concerns items sold by third-party sellers participating in Amazon's Fulfilled by Amazon program, where Amazon manages storage, packing, and shipping.

Historically, Amazon has claimed that liability for defective products rests with the third-party sellers and not with the platform facilitating the sales.