A federal appeals court in Philadelphia has ruled that Amazon can be held liable for products sold on its platform by third-party sellers.
The decision could have financial implications for the retail giant as it would be vulnerable to lawsuits for defective and even counterfeit products. More than half of Amazon’s sales come from 3rd Party Sellers.
This isn’t the first time this issue has been brought before the courts, but it is the first time the ruling went against Amazon. The company has always argued it should not be considered a seller, and is just providing a platform for the transaction. The 3rd U.S. Circuit Court of Appeals in Philadelphia disagreed.
“Amazon’s involvement in transactions extends beyond a mere editorial function; it plays a large role in the actual sales process. This includes receiving customer shipping information, processing customer payments, relaying funds and information to third-party vendors, and collecting the fees it charges for providing these services,” the court said in the ruling.
This case was tried in Philadelphia because the plaintiff lived there. Liability cases are usually argued under state laws.