Day: April 28, 2020

Amazon faces another lawsuit – This time for selling a faulty battery that burned down a Minnesota Garage

Customers are now beginning to feel skeptical about Amazon

In what is known to be the latest among a string of controversies faced by the internet retail giant, Amazon is facing a lawsuit over a faulty Chinese battery that burned down the garage of a resident in Minnesota.

According to Farm Bureau Property and Casualty Insurance Company, the online retail giant sold the battery to its client Dane Meyer (resident of Cottonwood, Minnesota) last April. Amazon should pay the affected person damages of $75,000 caused by the fire.

The insurance company claims in its complaint that the product was eligible for Amazon’s Prime Shipping. It was also in the spotlight as a choice product of the retail giant.

The complaint states:

“Through its ‘Amazon’s Choice’ program, Amazon recommends highly rated well-priced products available to ship immediately.”

The complaint mentioned that the battery caught fire when it was used with a charger listed as compatible in the product listing on Amazon’s website which was later determined to be incompatible.

Amazon is being sued by the insurance company for its failure to warn the customer, negligence, and liability. It not only promoted the battery but also played a part in selling it, customer fulfillment, and distributing it. It was delivered to Dane Meyer in a trademarked Amazon box.

Is this lawsuit just like another lawsuit? Or a test Amazon is facing for the goods it sells?

Sign of Amazon outside its Sunnyvale, California Office.
Sign of an Amazon Office in Sunnyvale, California. Source: Law.com

The current lawsuit Amazon is facing is the latest test on the amount of responsibility it bears for products sold by third-party sellers on its platform. The company has upheld its stance for some products sold in the past.

Amazon maintains that it only works as an intermediary between the seller and buyer. Thus, it cannot be held responsible for any defects in those products.

The Third Circuit Court of Appeals in July last year ruled 2-1 that Amazon was liable as the seller of products of third-party vendors. The court made the ruling in light of the case of a woman from Pennsylvania.

She lost vision in one of her eyes when a dog collar she purchased from Amazon broke and struck her directly in the face.

According to the opinion of the majority at the Third Circuit Court of Appeals:

“We do not believe that Pennsylvania law shields any company from strict liability simply because it adheres to a business model that fails to prioritize consumer safety.”

What kind of lawsuit is Amazon facing in California?

To add more fuel to the fire, California consumers recently filed a class-action lawsuit against Amazon on price-gouging.

Hagens Berman law firm filed a federal lawsuit against the online retail giant on behalf of two consumers: Oakland’s Mary McQueen and Selma’s Victoria Ballinger. They allege that they purchased goods from Amazon during the COVID-19 pandemic which they could not buy safely from physical stores.

However, they found prices set by Amazon to be higher than average.

The suit labeled Amazon’s alleged price-gouging tactics as ‘unacceptable,’ and further listed examples of products and their prices. It also claims that prices of face masks were raised by 500%, from less than $20 to $120. Similarly, cold remedies cost more than $35.99 after getting a price rise of 674% from $4.65.

Has Amazon taking a stand regarding price gouging?

Amazon has previously vowed to tackle price-gouging by third-party sellers on its e-commerce platform. The company has removed over a million products and banned those sellers who violated their pricing policies.

Amazon declined to comment on the lawsuit. However, in a statement issued to a private media company, a company spokesperson wrote:

“There is no place for price gouging on Amazon and that’s why our teams are monitoring our store 24/7 and have already removed hundreds of thousands of offers for attempted price gouging. We are disappointed that bad actors are attempting to take advantage of this global health crisis and, in addition to removing these offers, we have terminated more than 60,000 accounts and working directly with States’ attorney generals to prosecute bad actors and hold them accountable. We continue to actively monitor our store and remove offers violating our policies.”

Conclusion

Amazon’s statement is not convincing. The real problem, however, lies within the company itself. After seeing its marketplace boom since the year 2000, these incidents have certainly put Amazon’s reputation and business practices in question.

It is still unclear whether Amazon is deliberately overlooking the problem or is not acting in an unethical manner. One thing is for sure that it is in trouble for selling unreliable products through unverified sellers. This practice could ultimately see an end soon and may see Amazon face tighter regulations from the U.S Government.

It also may hurt Amazon’s position on the internet. The success story of the dot-com boom may now face an end if it does not check into allowing unverified sellers in selling defective merchandise on its platform.