Judge rules that Amazon isn't liable for damages caused by a hoverboard it sold | Hacker News Reader

Judge rules that Amazon isn't liable for damages caused by a hoverboard it sold

cnbc.com

83 pointsabduhl109 comments

Forget about the main focus of the article... (I would prefer liability to lie with the manufacturer, no store online or offline is equipped to expertly and independently analyze and judge the safety of all the things they sell, but whatever.)

But how on earth can Amazon sell something and then lose track of the merchant, especially a foreign one? There seem to be so many necessary guarantees this breaks, not just product liability but obeying import/export laws, handling taxes, financial regulations preventing money laundering, and so on.

How is it legal for an American company to sell, or even list foreign products to American consumers where the "manufacturer is unknown"? Is there some kind of loophole in the laws?

That was my first takeaway too. It’s one of the biggie no-no’s in banking to not know the customer. I’m at a loss on why that would be ok here.

I’m also fine with the manufacturer taking the liability but for the retailer to say we don’t know, is at best incompetence and at worst a middle finger to the US consumer.

The manufacturer should have to be required to maintain liability insurance with a claims process. If Amazon doesn’t enforce that standard, it should have to stand in.

That would make sense to me. Not to over simplify the issue but I would settle with Amazon having skin in the game period. They seem to be extremely good at engineering ways to deflect responsibility (financially or ethically).

That applies to domestic manufacturers and ones having legal representation on US soil. An "Uncle Liu garage factory co." obviously does not qualify as such.

They do require it:

https://sellercentral.amazon.com/gp/help/help.html?itemID=20...

However, they do not enforce it (IME) until you break $10K/mo

The article doesn't say that Amazon lost track of the manufacturer; it says that the customer wasn't able to get that information from Amazon.

> ...Judge William Campbell dismissed it on Wednesday. He ruled that even though it's undisputed that "the manufacturer of the hoverboard at issue is unknown"...

Would this not mean it's unknown to both sides?

IMNAL, My guess is that they can establish records of transactions they do with sellers and adhere to all transaction laws... but once they take possession of the good, they comingle it and can no longer tell where it came from.

That would be illegal. Imagine Pawn shop explaining to the cops they dont know which one of cameras/guns/rolex watches sold turned out to be stolen.

They regularly do this.

They fully admit to doing this:

https://sellercentral.amazon.com/gp/help/help.html?itemID=20...

Like what happened to this guy, for example? https://startupnation.com/start-your-business/plan-your-busi...

People have been complaining for a long time now that Amazon is hard to trust because of how many counterfeit/knockoff items get mixed in among genuine ones in their warehouses.

There was even a guy who lost his Global Entry status (trusted traveler program run by US Customs) because, unknown to him, he'd been thrown under the bus when a suitcase he ordered from Amazon was seized at the border for being a counterfeit:

https://lifehacker.com/your-amazon-order-might-lock-you-out-...

Amazon itself tends to keep quiet about this, but consensus in the various stories is that their system's set up to make it hard to know the origin of particular items, or to keep third-party (and potentially counterfeit) items separate from ones sourced direct from the manufacturer.

If you’re a foreign company selling on Amazon, even through a shell, you should be bonded and insured or whatever the equivalent that home contractors are required to have. If an electrical contractor can burn down my home and so can your shoddy product, they should require the same minimum insurance.

Edit: all companies, forget foreign.

>If an electrical contractor can burn down my home and so can your shoddy product, they should require the same minimum insurance.

You think companies like Google and Amazon don't buy from the same cheapest deal manufacturers?

At the very beginning of my career in 2008, I worked in a trade agency in Singapore, where I was an exchange student. Once, we came upon a client who was bragging to be the sourcing company working for all big named Co's around, Amazon and Google included. We were doing a very simple thing for them - getting USB ac/dc converters.

At first, we were truly surprised why such a "serious company" is not up to the task to do this trivial thing by themselves. The catch was they were demanding price just below $1 for a unit, packaged....

We found one miserable factory in SZ that was ready to do it for 87 cents, sans packaging.

On our request if they do get an idea what this involves, the client said yes.

Not only they went forward with that, they continued to fight for the price, and turned to thing as ridiculous as demanding use of cardboard PCB, shaving microns of plastic from the casing there and there, and, the most ridiculous, demanding "use two cheap diodes instead of this beefy one."

Two years later, I heard people were reporting that half of people buying Google Nexus were the lucky receivers of this usb charger batch.

Reading the book poorly made in China was eye opening.

The company I was talking about was an entirely American business.

You said the manufacturer was in SZ (so I assumed it means Shenzhen). The book is about international companies contracting with Chinese manufacturers, and talks about manufacturing in China. The resulting products are not sold in China but in the US.

Yes, the factory was in SZ, it was the US client who wanted to push down even those measly profit margins of ours and a factory

Yes, but Google and Amazon take on the liability. Do you think general contractors don't use the same cheap uninsured contractor that you could? They do. The difference is they're taking on responsibility for problems.

Sounds like there needs to be a “know your merchant” law. It makes sense to me that Amazon might not be liable, but it makes no sense at all that people can’t get in touch with the actual seller.

It makes zero sense to me that Amazon might be liable.

Based on his comment, I think mikeash meant “not liable”.

Agreed and I agree with him if that's what he meant, which is interesting to consider the different response each one got.

Much like gun manufacturers aren't responsible for their use, I can't imagine a platform which lets vendors set up their own shops online becoming responsible for what is sold by the vendor.

Meanwhile bar tenders in many states are responsible for drunk drivers. Craigslist is now responsible for sex traffic on it’s website (which is why personals are gone).

Liability laws are not consistent.

You’re correct. My brain must have taken a brief vacation. I corrected it now.

counterfeit items like SD cards dominate on Amazon. I tried reporting fake electronic equipment - nothing happened, except I seldom buy anything on Amazon anymore.

Amazon should at least be liable for willingly selling items that do not match the description (if they tell me it's a Sandisk SD, I buy it because I believe it is!)

I'm surprised SanDisk and other major brands that are getting their names dragged through the mud aren't doing something about it.

Even Apple can't prevent fake lightning cables from permeating Amazon, how is a much smaller company like SanDisk supposed to prevent fake microSDs? Its not as though Amazon is willing to QA every microSD card that passes through their warehouses.

> Its not as though Amazon is willing to QA every microSD card that passes through their warehouses.

Segregating stock from different venders would go a long way to fixing the problem. Right now everything is just thrown into the same slush bin, so Amazon can't tell which vendor sent them counterfeit goods when a customer complains.

I got a set of counterfeit guitar strings that was fulfilled by Amazon. Ordered them on Amazon purely out of convenance only to realize someone had sent a fake set of $4 strings.

The counterfeit packaging was almost perfect and the strings where metal (just not coated like they should be). I literally don’t even know why you would fake those.

The entire interaction is via the Amazon interface and amazon.com storefront. Amazon inserts itself between buyer and seller every bit as much as Sears or Macys. So they let some fly-by-night Chinese merchants fulfill the orders? That definitely should not be the buyer's problem.

It needs to stop. Amazon is making it easy for anyone to sell products, but the way they do it blurs some lines and allows sellers to ride on Amazons reputation. It's amazon.com, it's their checkout process, it's all Amazon but for the little indicator that it's a 3rd party seller. Oh, and the total lack of quality control or accountability.

1. A seller rents some storage space from a landlord to store the products he wants to sell 2. He uses a cloud provider to set up his website for customers to shop 3. He also uses a payment processor to process customers' orders 4. He then uses a shipper to ship them

In this case, should the landlord/cloud provider/payment processor/shipper be liable for defective products that the seller sells? There's a plethora of companies that play one or more aforementioned role(s), and it so happens that Amazon assumes all of them.

All of them should presumably be expected to have some idea of what entity they're doing business with.

Sorry, you probably caught my post before I added the "not" I managed to miss the first time around. I meant to say that I see why Amazon should not be liable, but they should at least be able to get you to the right people.

How is selling obvious fire hazard with counterfeit safety certificates (are those even required in US?) legal, and doesnt make you liable?

I'm so done with Amazon, it's all shady Chinese companies selling counterfeits and knockoffs. I was blown away when I bought fake Dove soap the other day in perfect looking packaging. It's impossible to trust anything on there.

What gave it away that the soap was a knockoff? I can't say I'd know how to identify counterfeit soap other than maybe extremely low quality packaging.

I happened to have the same soap bought at a Walgreens to compare it with. It smelled much worse, an unknown chemically smell, and it was about 30 percent smaller, though it still had the characteristic Dove oval shape.

Interesting. Were you able to get it refunded?

Not worth it.

You should, or at least report it. That’s how it continues.

Reporting doesn’t work. I reported a counterfeit item and amazon apologized and refunded the money and promised to go after the seller. In the end they removed all of the seller’s negative feedback since it was “fulfilled by amazon”. What a joke.

Is this something that would be worth reporting/forwarding to the manufacturers of the soap (Johnson and Johnson?). It seems that they would have a stake in preventing counterfeits of their products being sold and Amazon might be less willing to blow off complaints that come from the legal team of a multinational.

If you still have the counterfeit item and a copy of the correspondence between yourself and Amazon, it might be worth forwarding...

Edit: I realise I have responded to the wrong person. The point still stands, however.

The already know...

What are they going to do?

Sue Amazon? All legal precedents indicate Amazon will win

Sue the fly-by-night Chinese company? How?

Reports on Amazon go straight to /dev/null

When I was a seller on Amazon I got a whole bunch of scam messages from scam buyers. I reported each one and marked the message "no response needed." The latter is important because you're judged on how quickly you respond to customer inquiries. The only thing that happened was my seller account got dinged for marking too many messages "no response needed."

Usually on small dollar items they don't even ask for the old one back.

It's basically become Aliexpress with 200-500% markup and faster shipping.

Rightfully so, how can this be seen any other way? It's the manufacturer's responsibility to make a product that doesn't burn down your house.

Its the bazar companys responsibility to avoid counterfeit goods, by having the company who trades their leave either there winnings and/or a safety deposit behind in case they get sued.

Its also to make sure, the legal system of the customer binds on the trading contract and inform/warn the customer that the item in question could be a molotow cocktail.

I re-read the article a few times and saw no mention of the product being counterfeit. They are all chintzy, poorly constructed, and come out of the same factory or two. Even if there was a brand name to counterfeit, the "counterfeit" would likely be almost exactly the same as the genuine article. Monoprice has a business model based on this premise.

What is the metric for "Molotov cocktail"? Anything that has batteries with a high energy density can be extremely dangerous. Cell phones, laptops, RC cars, power banks, and anything with a lithium ion battery can catastrophically and potentially fatally fail. Sure, you could mandate that Amazon run their own battery of safety tests on every product that is sold on their site; they sure as hell could afford it. The problem is that there's just about nobody else in the market that can.

Most of that stuff simply never goes through Amazon's hands. Amazon simply acts as a Chinese dropshipper for overseas purchases.

They decided that it is best to copy AliExpress, than be overwhelmed by it.

The article explains another way to see it - because the manufacturer in this case (and most safety cases involving Amazon) are sketchy Chinese companies that are selling products that don't even attempt to meet any sort of safety standards, contain counterfeit safety markings, and are basically illegal to sell in the United States. Both the seller and manufacturer are impossible to track down when something goes wrong. I would bet even if you were able to track them down it would be impossible to enforce any fines or judgements against them because they are in an outside jurisdiction.

It can be argued that Amazon should have some sort legal responsibility to do a miminal vetting process for things it sells on it's site. Or, in other words, should be required to make an effort to only sell legal products.

"Not our problem that someone else is using our store to sell illegal and unsafe products that we store in our wearhouses, accept payment for, and deliver" shouldn't be a valid defense.

In your eyes, what would be the mechanism for a US citizen to sue a manufacturer who has no presence outside of China other than the Amazon marketplace?

I could imagine maybe a law requiring foreign companies to obtain a bond when selling consumer goods, if they don't have substantial presence in the U.S. This bond would be a surety that consumers could recover damages in the case of negligence, at least up to a certain amount. I don't see the argument for requiring Amazon to perform that service, though.

Suppose the foreign entity decided to flout that law, and never did acquire a bond, or reported a nonexistent bond. Would it be Amazon's responsibility to detect this situation, and what remedy would be available to the customer regardless?

It should be a registered bond with a trusted source. You wouldn't trust escrow funds that weren't held by a trustworthy party if you were involved in real estate.

Would Amazon then check and enforce the status/claims against the bond as part of processing each order? It's an interesting idea for sure.

It seems like this would put a total stop to inventory commingling, which does sound attractive, at an abstract level.

Letter of Guarantee?

https://www.investopedia.com/terms/l/letter_of_guarantee.asp

This isn't a hypothetical; you can already buy stuff from tons of Chinese companies online -- good luck getting any recourse in a Chinese court if you have a dispute.

That is why I bought from Amazon and not Chinese companies. little did I know Amazon is No better.

> That is why I bought from Amazon and not Chinese companies. little did I know Amazon is No better.

There is a big difference between buying from Amazon and buying from company X, fulfilled by Amazon.

That difference is not obvious, especially for infrequent users or less-technical users.

Not from a consumer point of view: same website, same listing, same cart, same checkout and payment process. "AMAZON" even appears on the bank statement.

Literally the only difference is a tiny icon on the product page saying "Marketplace".

The consumer has no contract with the manufacturer. It is the vendor's responsibility. Of course, the vendor can sue the manufacturer but that's a separate thing.

However, Amazon is successfully arguing that they are not the vendor. The vendor is a third party using Amazon's platform.

Edit: that said, I think this needs to change.

Following the same logic eBay would be liable for anything anyone sells on it. And Etsy too.

Expanding even further next in the line would be Craigslist, with the defense hinging on argument they don't facilitate payments like etsy, amazon or ebay.

So where do we draw the line?

One possible line is that you can't have a vendor-vendee relationship between two parties if one of them doesn't know the other exists. It's nonsensical to claim that Amazon is facilitating a relationship between manufacturer and buyer if we take at face value the claim that they don't even know who the manufacturer is. At that point, Amazon effectively owns the product and is a reseller.

Let’s keep it simple. Whoever takes the money is the vendor. Amazon lists it, amazon fulfills it, and they get paid for it. Sounds like the vendor to me.

Except Amazon doesn’t list it. The vendor does.

...except the listings that are "Fulfilled by Amazon"...no?

Amazon doesn't add the items to their inventory. Someone who has one to sell (a VENDOR) lists the item for sale with Amazon. If it is "Fulfilled by Amazon", that just means that the vendor sent the item to one of Amazon's warehouse, and then Amazon send the item to the buyer after the sale.

If it isn't "Fulfilled by Amazon", when the item is sold, the vendor ships the item directly to the customer.

I exclusively use Amazon and fulfilled by Amazon under the assumption they have some sort of QC in place since it's their warehouse, payment processor, and customer support that I have to deal with it. But no, doing that does not guarantee me that I won't be sent questionable goods.

Ebay on the other hand I am under no illusion that they are not the vendor. Same with Craigslist, Etsy, Tindie, etc.

If instead of the seller's name the only thing eBay told you was "sold on eBay market", I bet they would be liable too.

When I buy something, the warranty included with the unit is from the manufacturer, not Amazon.

Amazon takes your money, they are responsible for the shit they receive.

I’ll be curious to see what happens when Amazon sells a fake Apple iPhone charger, which subsequently burns a house down. The difference here is that Amazon advertised it as Apple brand. Or is that going to be on the shoulders of the wholesaler^W”seller”, too?

I would assume that all iPhone chargers on Amazon are fake. Would Apple be ok selling their products through Amazon?

I know that all "Apple" wired headphones on Amazon are fake. The AirPods are probably genuine.

I know this not to be the case. Many of them are but there is some legitimate inventory there, I know several people in the industry.

I just searched on Amazon for "Apple headphones". On at least the first page, all of the reviews stated they were fake.

Can you find a link for genuine Apple headphones from Amazon?

The first link has almost 11 thousand reviews and currently 34 sellers. 44% of those reviews are 5 star. 34% are 1 star.

It is certainly the case that some of those sellers are selling fakes. It is also likely that some are selling authentic products.

This is the first link

https://www.amazon.com/Apple-MD827LL-EarPods-Remote-Mic/dp/B...

The Q and A section and many of the reviews are saying that they are fake.

They are $13.99. The real Apple headphones are $29.99

https://www.apple.com/shop/product/MNHF2AM/A/earpods-with-35...

Apple never sells anything at wholesale at over a 50% discount. Where would a third party company be getting new Apple headphones from where they could sell them profitably at $13.99?

Carrier auctions, mostly.

Anyway, if many of the units sold are fake and some are real, you'd expect a large number of reviews both ways, which is what you can see.

Some wouldn't know they were fake and others wouldn't care.

Amazon is known to mix stock based on the EAN/UPC. If a merchant is inserting counterfeits that bear the same barcode as the original, they will be mixed together with the real thing with no traceability, and buyers could end up with the fake even if they bought it from a legitimate seller.

Amazon is an Authorized Apple Reseller. They sell plenty of stuff, iPods, Airpods, Macs, Apple Pencil directly. Then, there are many third party sellers, some of which are likely selling fakes and some selling legitimate goods.

Apple has said that 90% of the "genuine" chargers on Amazon are fake and they've sued some sellers [1]. They haven't sued Amazon, and this story is probably why.

[1] http://fortune.com/2016/10/19/apple-amazon-charger-lawsuit/

Plenty of fake iPhone chargers bought on Amazon have caused fires and serious injuries. So far nothing of note has happened as a result.

Couldn't Walmart also say they're just a marketplace and abdicate responsibility the same way Amazon did?

I understand that making the shop rather than the manufacturer liable for such a thing would prima facie seem strange.

But since amazon profited from the sale, where I'm from (Australia) they might need to show they weren't recklessly indifferent to the safety standards of the manufacturers they stock - especially this one, but also as a policy in general.

Perhaps there is some useful question here, seeing the number of comments regarding fake, counterfeit or unsafe products. Might these outcomes be "reasonably foreseeable"? Again, where I'm from this could cause Amazon some issues - I only hope other legal systems have similar principles.

This is just going to make me more and more wary of buying through Amazon. Good companies aren't afraid of accountability.

We know how Americans think; meaning if they had won this one many people would start pretending a product bought on Amazon puts their lives at risk just to sue amazon and get a bit fat check; even burning their own house if they can win for more than the house is worth.

I learned that a friend was (maybe still is) selling vitamins and probiotics through Amazon. I wasn't able to learn who was producing it only knew that it was made in US and most likey a neighbor.

He also was selling vitamin K, when asked my doctor about she said she would recommend not to take it, and the daily dose suggested is typically prescribed and usually taken one time.

That seriously made me cautious about it, literally anyone can start selling on Amazon and there is not easy way to figure out where things come from.

Well seeing that most experts think that taking vitamins and are worthless anyway, it wouldn't really matter if they were fake....

https://www.webmd.com/vitamins-and-supplements/news/20131216...

I'm not convinced that taking probiotics isn't junk science.

It would matter if they contained unlisted ingredients that were allergens or worse, toxic. It would also matter to someone like me - I take vitamins because of measured vitamin deficiency that I wasn't able to correct with diet alone. If my vitamins did not contain vitamins I would start to have deficiency symptoms again.

Counterfeit vitamins and supplements are a big problem on Amazon as well. I bought Schiff COQ10 on Amazon and got fake product.

To be fair, you could get real Schiff CoQ10 and still get fake and/or ineffective product. Schiff isn't a good brand, just a big one.

Since a year or more Amazon is tough on vendors in regards to safety issues. More products require regulatory approval and a single product review mentioning safety problems can get a product pulled.

If Amazon can profit off a listing then why shouldn't it be held liable for the damage caused due to the listing? If Amazon has already put up an agreement which frees them from liability then it sounds like, "Ok, I'll be with you in your good time but I'll walk away as soon as you have a misfortune" like an unfaithful life partner.

Of course, I know this is by design. But is it ethical?

Shouldn't the liability be placed on the company actually selling the product through amazon? Amazon is a marketplace, not a manufacturer, in most cases I think

Amazon does profit off the listing is my assertion. Without Amazon, listing's ability to damage at scale is limited. Can't we argue that it is one of the partners in crime?

Amazon profits off of it, but so do the shipping companies and payment processors that helped sell the product and increase its sales. I don't think a platform that provides a service should be responsible for those that use the service, unless they explicitly claim responsiblity by saying they guarantee quality of their merchants or something. If amazon is responsible for the damage caused by their products, than so are places like Craigslist and eBay.

Surprised Amazon even allows you to sue it, what with mandatory arbitration being all the rage.

Welcome to America. Corporate power rules.

It makes sense for Amazon to not be liable for damages caused by the manufacturer (should eBay be liable for everything sold on its platform?).

But doesn't it also make sense for Amazon to be liable for allowing 3rd parties to sell counterfeit or not-as-advertised items?

Also, how far does this go? Where is the line crossed?

I heard an argument once that said basically almost all tech companies are just profiting off the arbitrage between the developed and the developing world.

Cheap goods make in China are facilitated by Amazon, and all media and content companies are basically just advertising for those products.

I wonder how this will apply to solar glasses. Amazon has to require standards and insurance from sellers.

By this reasoning no merchant is ever liable for any of their products because they all come from third parties. Tablet blows up? Don't blame Samsung or Apple, blame the supplier in China. This is all part of the trend over the last few decades of removing any accountability, responsibility, or liability big companies might have towards people so they can profit more and never be held responsible for their actions. This also follows the same trend in government itself where public officials and servants themselves are no longer held responsible for their actions even when their actions cause the loss of human lives. In a culture that loves nothing more than to blame others and never accept blame, this leads to government and companies that respond to no one, are not regulated or overseen by anyone, and eventually commit atrocities including maiming and murdering people for profit and advancement. We really should start to think as a society about holding these entities responsible for their reprehensible actions. Otherwise what is the message we give as a society? That it's ok to hurt and kill others as long as you do it as part or a company or government. Is that the type of society we really want to be?

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