Online shopping continues to thrive worldwide. In the United States, 40 percent of Internet users state that they purchase products and services online on a regular basis, which shows that the online marketplace has become embedded in consumer behavior. Among the top online shopping sites in the US are Amazon, eBay, Kohl’s, Walmart, Etsy, and Zappos. As these shops are considered third-party vendors, how does product quality control work? How does product liability work in the online marketplace?
What is Product Liability?
Products must meet a consumer’s ordinary expectations, and a defect or unexpected danger definitely does not meet ordinary expectations. It is the responsibility of manufacturers and sellers to ensure that the products they put in the market are safe for the use of the consumer. Design defects, manufacturing defects, and marketing defects may be considered in a product liability claim. In such a claim, all or any of those involved within the distribution chain, from the manufacturer to the retailer, may potentially be held liable.
Can third-party vendors such as Amazon and Alibaba be held liable for a defective product?
In a court case in Pennsylvania, it was definitely stated that Amazon was not liable for a defective product purchased from the online platform. In Oberdorf v. Amazon.com, Inc., the plaintiff bought a dog leash from a company that sells through Amazon. The dog leash turned out to be defective and ended up injuring the consumer. The plaintiff sued Amazon for product liability, breach of warranty and duty, and negligence; however, it was ruled that the liability does not extend to Amazon as it is a mere medium through which sellers market their products.
Similarly, in Englert vs. Alibaba, the online platform alibaba.com was sued for allegedly selling counterfeit and tampered products. The court dismissed the plaintiff’s claims for fraud, breach of contract, and negligent misrepresentation, as Alibaba has robust terms of service, which explained that Alibaba is merely an intermediary and that it is not responsible for the quality of the products and services, or any information given by sellers.
How can online sellers protect themselves?
- Make sure to provide accurate and detailed description of the products you are selling. When buying online, consumers cannot thoroughly inspect your product, so they rely on the details you put in the description. As much as possible, include clear photos of the product in different angles and provide clear and extensive description of the product.
- Take the time and effort to include a terms and conditions section in your website. Include in your terms and conditions some limit of liability clauses, which can put a limit on the amount of money that an unsatisfied customer can receive.
- Do due diligence in researching and complying with consumer regulations. Familiarize yourself with consumer protection advisories such as “choking hazard,” “for topical use only,” and “children must have adult supervision when using this product.” If you are selling food products, make sure that there is nutritional information on the label.
- Make sure that you only transact with reputable vendors and suppliers. Be wary of deals that are too good to be true, or suppliers who charge too low. Do research and ask around to make sure that everyone you are dealing with has good reputation in terms of production and quality.
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