Is Amazon Responsible for the Sales by Third-Party Sellers?

Technology platforms govern consumer experience in a huge way. Users simply come to the platform, search for what they want, and start using it. Behind this consumer behavior, is the implicit trust in the platform that its users will act in the best interest of other customers. Apple’s App Store, Amazon’s Marketplace and Mastercard’s payment services are some examples.

Apple vs. Amazon on governing its customers

Apple has been very careful about who it allows to operate on its platform and regularly weeds out apps which might exploit its users, such as the recent case of a few dating apps. They were removed from Apple’s App Store because they allowed children as young as 12 to access them.

On the other end of the spectrum is Amazon. Amazon has aggressively expanded its third-party seller base. Now it accounts for about half the revenue generated by the e-commerce division of Amazon.

But in the process, they have been accused of being lax about the quality of merchants they have allowed on the platform. This has enabled counterfeits and sometimes, dangerous items to be sold on the biggest online marketplace in the US.

3rd party seller avoiding responsibility for defective goods

Recently, a federal court has ruled that Amazon can be held liable for defective goods sold on its site by third-party sellers. This has come after a long battle where earlier a lower court had ruled in Amazon’s favor.

CNBC reported, “The decision on Wednesday related to a case in which a Pennsylvania customer, Heather Oberdorf, purchased a retractable dog leash on Amazon.com from a third-party vendor, The Furry Gang. While walking her dog in 2015, Bernardo was blinded after the leash suddenly recoiled. Neither Oberdorf nor Amazon have been able to contact The Furry Gang.”

How will Amazon deal with the backlash?

So why is Amazon being held responsible? The central point is the customer’s trust in Amazon. Amazon only allows customers to contact the seller through Amazon. This means that the merchants can conceal themselves from the customer, putting the onus squarely on Amazon in case of malfeasance.

There are a couple of paths Amazon can take from here. One, it can increase the scrutiny for the quality of merchants, making it harder to sell on Amazon. On the other hand, it can allow direct access for customers to merchants, losing control of customer experience. Given Amazon’s obsession with customers, we can only expect an innovative solution just around the corner.