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Product Liability in the Online Marketplace

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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?

Contact us at Hogan Injury for expert legal advice.

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