Amazon Just Got Hit With A Recall Rule That Could Seriously Change The Products It Delivers

In what could be a major development in the e-commerce community, the U.S. Consumer Product Safety Commission (CPSC) issued a landmark decision and order deeming that online retail giant Amazon is, according to federal safety laws, responsible for hazardous products sold on its platform by third-party sellers. The decision resulted from a unanimous 5-0 vote from the CPSC, who determined that Amazon has acted as a distributor of both defective products and those failing to meet federal safety standards for consumer products, and therefore bears responsibility for their recall.

The legal proceedings began via an administrative complaint filed in July 2021 which alleged the online retailer, which booked more than $570 billion in revenue last year alone, both distributed and failed to sufficiently warn consumers about faulty and unsafe products sold through the Fulfilled by Amazon program. Moreover, the decision notes Amazon failed to encourage consumers to return or destroy defective items like carbon monoxide detectors and children's pajamas that do not meet federal flammability standards, among others.

Amazon argued that it was not acting as a "distributor" for the noted products during the proceedings, and therefore bore no responsibility for warning buyers of possible hazards. The company's legal team also suggested that messages sent by Amazon to consumers warning of potential issues, as well as its offering of Amazon credit for defective products, were enough to cover the issue. However, both the CPSC and an administrative law judge did not agree, naming Amazon as the responsible party. 

In a statement to NBC News, an Amazon spokesman stated, "We are disappointed by the CPSC's decision," before adding, "When we were initially notified by the CPSC three years ago about potential safety issues with a small number of third-party products at the center of this lawsuit, we swiftly notified customers, instructed them to stop using the products, and refunded them." Despite those claims, with the CPSC's ruling now official, Amazon will need to begin plotting the next steps in remedying the issue.

While it isn't immediately clear how the e-commerce giant will do so, the first step it will need to take is developing and providing the CPSC with its plan to notify both the general public and those who purchased one of the items in question about the hazards. It will also need to provide guidance in how it plans to issue the latter group a refund or replacement. Likewise, Amazon will need to provide its plans to remove the questionable items from its platform. 

With powerful outlets like Consumer Reports applauding the CPSC's ruling against Amazon, the online retailer may want to deliver those plans sooner rather than later. If only to bolster confidence in its worldwide consumer base, some of whom may already think that buying from Amazon can be risky – especially after being sued by the FTC for shady Prime member practices. 

Once those plans have been delivered, Amazon bosses will also face the mammoth task of ensuring that such hazardous products are no longer available through the site moving forward. Needless to say, that could dramatically alter what products are offered for sale on Amazon moving forward. Perhaps more worrisome to some consumers is that it may also impact the price point of those offerings. We'll wait to see if this goes down as one of the biggest moments in Amazon history.