Amazon may have to recall-ibrate its strategy for items that violate consumer safety standards.
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After extensive legal back and forth, the Consumer Product Safety Commission ( CPSC ) issued a decision and order cementing Amazon’s role in recalling hazardous products. The products at issue included children’s sleepwear that did not meet flammability requirements, faulty carbon monoxide detectors and hair dryers without immersion protection.
According to CPSC documents, third-party sellers in Amazon’s Fulfilled By Amazon ( FBA ) program sold more than 400,000 units of these three products. The commission said it determined the safety issues with the products upon ordering the items from Amazon and testing them against regulations.
Throughout the legal battle between the e-commerce giant and the agency, Amazon insisted that it qualified only as a third-party logistics provider where FBA is concerned. FBA allows third-party sellers to offer their products to buyers on the Amazon platform; these sellers ship their items to Amazon warehouses for the company to process, fulfill and deliver to customers.
The CPSC, however, has ruled with the backing of an administrative law judge (ALJ) that Amazon is a distributor, not a third-party logistics provider , stating that the company offers a “comprehensive package of services—certainly not just logistics—that Amazon requires its Fulfilled by Amazon participants to accept,” and noting that “Amazon does considerably more than is allowed by the definition of ‘third-party logistics provider.'”
While distinguishing between a third-party logistics provider and a distributor may seem like mere nuance, it’s those labels that were at the crux of the CPSC’s orders to the company. Some third-party logistics providers would be excluded from the mandates CPSC sets forth around product recall standards, but distributors don’t have that same immunity.
The CPSC alleged that Amazon skirted its standard procedure for protecting consumers when a safety-related recall crops up for a product sold on the platform, whether directly by Amazon or, as in these cases, by a FBA seller.
Amazon, however, has already made it clear that it won’t simply be taking the CPSC’s orders in stride. A spokesperson for the company told Sourcing Journal via email that the company plans to appeal the decision.
“We are disappointed by the CPSC’s decision. We plan to appeal the decision and look forward to presenting our case in court. 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,” the spokesperson said.
But the CPSC wasn’t satisfied with Amazon’s actions.
The agency alleged that the company issued gift cards back to consumers who purchased the effected products, rather than a refund to their original forms of payment.
It also said Amazon’s notification about the recalls was inadequate. According to the CPSC, Amazon messaged customers who purchased the pajamas, carbon monoxide detectors and hair dryers via the messaging feature on the Amazon app, rather than emailing, calling, texting or contacting them by mail.
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The CPSC does concede that Amazon removed the recalled listings upon receiving notification. The spokesperson for Amazon said that’s standard practice.
“In the event of a product recall in our store, we remove impacted products promptly after receiving actionable information from recalling agencies, and we continue to seek ways to innovate on behalf of our customers. Our recalls alerts service also ensures our customers are notified of important product safety information fast, and the recalls process is effective and efficient,” they said.
The CPSC took issue with the wording of Amazon’s messaging, too. Specifically, the commission flagged the fact that Amazon did not use the word “recall,” instead choosing to write, “Important safety notice about your past Amazon order” and stating that items “may fail” to meet federal standards for consumer safety.
Amazon also told customers that, “‘There is no need for you to return the product’ and that they should ‘dispose’ of it.” Per the CPSC, that doesn’t go far enough to ensure the unsafe items were destroyed. An ALJ agreed.
Amazon will now be required to undergo a formal recall process, which may include public notification via social media, further refunds and more.
“Under the Commission’s Decision and Order, Amazon must submit proposed plans to notify consumers and the public about the hazardous products, and to remove the products from commerce by incentivizing their return or destruction. The Commission will consider Amazon’s proposed plans and address them in a second order in this case,” the CPSC wrote Tuesday.
Amazon said it maintains its products don’t pose a risk to consumers, despite the CPSC’s orders.
“We stand behind the safety of every product in our store through our A-to-z Guarantee, regardless of whether it is sold by Amazon or by one of our selling partners,” the spokesperson said.
But despite Amazon’s unsavory feelings about the order—and its promise to appeal—consumer-focused organizations have come out in praise of the CPSC’s actions. Oriene Shin, policy counsel for Consumer Reports, said the non-profit backs the agency’s decision.
“This is clearly the right decision. There’s no good reason for a company to be exempt from these sensible requirements just because it hosts an online marketplace; otherwise, products that could injure or kill people might slip through the cracks,” Shin said in a statement. “Consumers are affected either way, and need the company to step up. We appreciate that the CPSC’s leaders agree and we thank them for this order, which marks a major step forward for consumer protection online and helps hold online marketplaces accountable in the future.”
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