Don’t be Fooled by Amazon’s New Product Liability Policies

By Casey Gerry August 30, 2021

Starting September 1, 2021, Amazon will implement new policies that will affect any customer harmed by a defective product coming from Amazon’s announcement of the changes is here.

Ostensibly, the revamped policies would seem to be a positive development. For example, Amazon is offering to pay all claims under $1,000, which Amazon claims is “more than 80% of cases,” and “may step in to pay claims for higher amounts if the seller is unresponsive or rejects a claim [Amazon believes] to be valid.” Amazon is also launching something it calls the “Amazon Insurance Accelerator”—a network of “vetted insurance providers”—to help third-party vendors buy liability insurance. Finally, Amazon is retooling its complaint process, meaning it will notify vendors of complaints it deems valid and will “step in to directly address the immediate customer concern” and “separately pursue the seller” if the third-party vendor is unresponsive. In so doing, Amazon says it is “going far beyond our legal obligations and what any other marketplace service provider is doing today to protect customers.”

This all seems like good news, right? Not so fast. There’s a lot Amazon isn’t saying, which could be concerning. First, consider the $1,000 cap. Is that really going to help anyone who has suffered actual injury or property damage? No. At most, it will allow for the replacement of a product that malfunctions and damages itself. That’s not a bad thing, necessarily, but it won’t have any real impact on legitimate product liability cases. Also, although Amazon hasn’t said so, I’m betting that $1,000 comes with a broad liability waiver, making sure any takers can’t go after Amazon for more. What about Amazon’s assertion that it “may” step in and pay more in some cases? Well, it can already do that. Amazon has always had the ability to pay claims, it just refuses to do so. So that is meaningless.

Likewise, the new complaint resolution process leaves many questions unanswered. Providing injured consumers with greater access to third-party vendors isn’t bad, but what are the consequences? Clearly, Amazon is trying to position itself as the innocent middleman in product liability disputes rather than a responsible party. By saying it will help consumers go after third-party vendors, the additional unspoken request is “don’t come after us.” But no third-party vendor will have Amazon’s ability to make injured consumers whole. Even if Amazon is successful in getting more vendors to carry insurance—which would be a positive development—that doesn’t mean Amazon should be off the hook. It remains an integral participant in the sale and distribution of its products.

So while these new policies may have some superficial appeal, I fear they are mostly a stunt designed to offset the negative publicity Amazon has been getting lately, and also a subversive effort by Amazon to portray itself as something other than a retailer to avoid responsibility for all the damage caused by the defective products sold on its website. After all, these new policies suddenly appeared not long after Amazon was sued by the Consumer Product Safety Commission for selling a slew of dangerous products. And there are many states where the question of whether Amazon is strictly liable remains unanswered.

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