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US court rules Amazon can be held liable for sellers’ faulty products

Amazon could soon find itself defending lawsuits from customers if a recent ruling in a US federal appeals court stands.

On Wednesday, the 3rd US Circuit Court of Appeals in Philadelphia ruled in favour of Heather Oberdorf, who sued Amazon in a federal court in the US state of Pennsylvania 2016, Reuters reported.

Oberdorf claims she was blinded in one eye when a retractable dog leash she bought on Amazon snapped and hit her in the face.

The leash was sold by The Furry Gang, a third-party seller on Amazon’s online marketplace. Neither Oberdorf nor Amazon has been able to locate any representative of The Furry Gang, Reuters reported.

This seems to have been a key factor in the 3rd Circuit’s ruling, which reversed the ruling of previous courts, including two other federal appeals courts.

Writing for a 2-1 majority of a three-judge panel, Judge Jane Richards Roth said Amazon may be held liable in part because its business model “enables third-party vendors to conceal themselves from the customer, leaving customers injured by defective products with no direct recourse to the third-party vendor.”

The case has now been sent back to the lower court to decide whether the leash was actually defective.

If the ruling stands, it could expose Amazon to a slew of lawsuits from customers. Most experts estimate the marketplace supports millions of third-party sellers globally, though it is unclear what impact a US court ruling would have on Amazon’s marketplace operations in other markets.

In Australia, the ACCC is tasked with ensuring businesses comply with consumer protection laws. Internet Retailing is seeking clarification from the consumer watchdog on its understanding of online marketplaces’ liability in Australia.

Amazon Australia had not responded to a request for comment at the time of this writing.

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