CPSC Orders Amazon to Put System in Place to Notify Consumers of Product Recalls

Amazon’s argument that it was not a distributor of the recalled products was shot down by both the CPSC and an Administrative Law Judge.

Federal safety officials are requiring Amazon to develop a system to promptly inform consumers about recalls involving products sold through the website, after finding that it continues to sell a number of hazardous products and fails to take sufficient steps to urge customers to return or destroy dangerous items.

The U.S. Consumer Product Safety Commission (CPSC) issued a press release on July 30, announcing a Decision and Order (PDF) that determined Amazon meets the definition of “distributor”, and bears responsibility for the recall of products that are defective or fail to meet federal safety standards, such as faulty carbon monoxide detectors, hairdryers that fail to contain electrocution protections and children’s sleepwear that violates federal flammability standards.

The Commission indicated that more than 400,000 products are subject to this order, including items sold by third-party sellers on Amazon.com, which pose a significant safety hazard under the Consumer Product Safety Act (CPSA).

Under the Act, the Commission can require manufacturers, distributors, or retailers to warn consumers and provide remedies if a product is found to be hazardous. When third-party sellers list dangerous products through a distributor’s platform, the distributor can be held responsible for addressing the risks.

In this case, third-party sellers used Amazon’s “Fulfilled by Amazon” program to sell hazardous products. The program not only allows listing on Amazon.com, but also offers various services to sellers.

During oral arguments held after the CPSC filed an administrative complaint in 2021, Amazon did not dispute that the products were hazardous, but argued it was not a distributor under the CPSA and thus not responsible for taking action. The Administrative Law Judge (ALJ) and the Commission both disagreed, ruling that Amazon acted as a distributor.

The online retailer also claimed that informing initial buyers about potential safety issues and giving them Amazon credits was enough. However, the ALJ and the Commission found these actions inadequate and insufficient to protect the public.

Amazon must now create and submit plans to inform buyers and the public about the dangerous products and offer refunds or replacements. according to the CPSC order. Public notice is important so that everyone, including those who received the products as gifts or bought them second-hand, can learn about the risks, the Commission indicated, noting that it will review these plans and then issue a final order on Amazon must notify people of recalls to address the problem.