Amazon must recall unsafe products sold by independent sellers, a consumer agency says

A top U.S. consumer safety agency says it's the responsibility of Amazon to recall unsafe products listed for sale on its website by third-party sellers.

The U.S. Consumer Product Safety Commission (CPSC) said in a decision on Tuesday that the retail giant qualifies as a "distributor" and therefore bears a legal responsibility for recalling dangerous products and informing customers and the public.

A spokesperson for Amazon, where independent sellers account for more than 60% of the platform's sales, said the company plans to appeal. "We are disappointed by the CPSC's decision," the spokesperson said.

Tuesday's decision stems from a lawsuit filed by the CPSC against Amazon in 2021 over a slew of products offered on the retailer's website that the agency found to be unsafe.

They included children's sleepwear that didn't meet federal flammability standards, carbon monoxide detectors that failed to detect carbon monoxide and sound their alarms, and hair dryers that didn't protect against electrocution when immersed in water. Amazon sold more than 418,000 units between 2018 and 2021.

The Amazon spokesperson said that when the CPSC informed it about the safety issues, it "swiftly notified customers, instructed them to stop using the products, and refunded them."

But in its decision, the CPSC criticized Amazon's response. It said that the company's messages to buyers didn't include the word "recall" and lacked other critical information and that Amazon didn't adequately incentivize consumers to return or destroy the dangerous products.

Amazon had argued that it was just a "third-party logistics provider" and that it "bore no responsibility for the safety of the products sold under its Fulfilled by Amazon program," according to the CPSC.

The Fulfilled by Amazon (FBA) program, also called Fulfillment by Amazon, allows third-party retailers to list products for sale on amazon.com and store them at Amazon fulfillment centers. Once an order is placed, Amazon processes customer payments, ships orders and serves as the point of contact for customer service issues.

But an administrative law judge previously found that Amazon qualified as a "distributor," and the CPSC agreed in its decision on Tuesday.

"Amazon cannot sidestep its obligations under the [Consumer Product Safety Act] simply because some portion of its extensive services involves logistics," the agency said.

Amazon, which earned more than $574 billion in sales last year, will have to submit a plan to the CPSC outlining how it will notify customers and the public about hazardous products and incentivize buyers to return or destroy the products.

Consumer advocates praised the CPSC's decision, saying it was a win for shoppers trying to navigate the world of e-commerce.

"This order is about making sure Amazon is just as accountable as every other company that sells products to consumers who often think that if something is for sale, it must be safe," said Teresa Murray, consumer watchdog director at U.S. PIRG, in a statement.