On July 29, 2024, the United States Consumer Safety Commission (CPSC) ruled that Amazon is a product distributor obligated to comply with the Consumer Product Safety Act (CPSA). This ruling will likely increase Amazon oversight of brands selling children’s products through the platform, including baby carriers.
Amazon is a product distributor
For the first time, the CPSC has determined officially that Amazon is a product distributor, not a logistics provider. In the wake of this decision, Amazon will likely revise their terms and conditions and conduct a careful compliance review of the products on their website, including a review of their children’s product certificates.
Countless brands of baby carriers are sold via the Amazon.com platform, including brands who are members of the BCIA. The BCIA strongly recommends that all baby carrier manufacturers conduct an internal product compliance review in anticipation of these changes.
Until now, Amazon has relied on brands themselves (or third-party resellers) to manage product compliance, and they have asserted that they have no obligation to meet the product compliance rules governed by the CPSA law. However, if Amazon is a product distributor” rather than a “third-party logistics provider, that changes their liability significantly.
By officially ruling that Amazon is a product distributor, the CPSC indicates that Amazon.com has a responsibility to ensure products on the site meet compliance requirements set forth in the CPSA.
But I thought Amazon is a product distributor already?
For years, Amazon has fought efforts to classify them as a retailer or distributor. Their argument has been that their business model is unique – that they are merely a “logistics provider” for third-party sellers in their Fulfilled by Amazon program.
They have never claimed that all products on their website are free of hazards or compliant with US law. In fact, when the US CPSC sought to take action against Amazon for hazardous products sold on Amazon.com, Amazon acknowledged that at least 400,000 hazardous products have been sold on their platform. However, Amazon argued, as a “logistics provider,” it’s not their responsibility to ensure that all products sold via their website are safe for consumers.
The CPSC asserts that “[f]rom pricing and payment processing to packaging, delivery, and tracking on the front end to post-sale customer service, returns, refunds, and recalls on the back end, Amazon exerts extensive control over products sold through its Fulfilled by Amazon program.” Therefore, Amazon is a product distributor and subject to all relevant aspects of the CPSA law.
If Amazon is a product distributor, what does that mean for product recalls?
When Amazon identified hazard patterns in the products related to this brief, it conducted its own internal process of notifying customers about the potential hazard. However, their actions didn’t satisfy US laws governing product hazards.The CPSC decision states that “[d]espite conclusive testing that the products were hazardous, Amazon’s messages advised the customer only ‘of a potential safety issue that may impact your Amazon purchase(s).’” The CPSC goes on to name several other problems with Amazon’s approach.
The laws governing product hazards are outlined on the CPSC website:
If you are a manufacturer, importer, distributor, and/or retailer of consumer products, you have a legal obligation to immediately report the following types of information to the CPSC:
- A defective product that could create a substantial risk of injury to consumers;
- A product that creates an unreasonable risk of serious injury or death;
- A product that fails to comply with an applicable consumer product safety rule or with any other rule, regulation, standard, or ban under the CPSA or any other statute enforced by the CPSC;
- An incident in which a child (regardless of age) chokes on a marble, small ball, latex balloon, or other small part contained in a toy or game and that, as a result of the incident, the child dies, suffers serious injury, ceases breathing for any length of time, or is treated by a medical professional; and
- Certain types of lawsuits. (This applies to manufacturers and importers only and is subject to the time periods detailed in Sec. 37 of the CPSA.)
Once a company has notified the CPSC of potential product hazard, the CPSC decides whether to recommend a voluntary recall. If the company chooses not to conduct such a recall, the CPSC may issue a press release about the allegedly hazardous or noncompliant product and, in some cases, may take legal action to adjudicate a mandatory recall.
In this case, the key question was whether Amazon is a product distributor or a logistics provider. If Amazon is a product distributor, then they are subject to the recall rules outlined above.
If Amazon is a product distributor, what happens next?
An Amazon spokesperson has told NBC news that the company intends to file an appeal of this decision in federal court.
However, the US CPSC has issued orders in their decision mandating that Amazon take certain steps in a 45 day plan.
In this decision, the CPSC has reiterated that it is not only the product manufacturer or US importer responsible for product compliance and conducting recalls, but also distributors and retailers in the chain of commerce. This is a reminder to any entity in the business of selling consumer products, especially children’s products like baby carriers, that both a product compliance plan and a product recall plan are critical components of doing business.
BCIA Product Compliance Resources
The BCIA has a library of resources about product compliance. Some are for members only, while others are available free of charge.
You can view the resource library either through your member dashboard, or by following this link.
Read the full CPSC decision
The CPSC has published their 74 page decision on their website. You can view it by following the link below.