Amazon to Pay Up to $1,000 For Injuries Caused by Sellers’ Goods

(Bloomberg) -- Amazon.com Inc. is offering to compensate customers for injuries caused by goods from its third-party sellers, a guarantee that follows numerous lawsuits seeking to hold the world’s largest online retailer responsible for dangerous products purchased from its digital shelves.

In a blog post on Amazon’s corporate site on Tuesday, the company said it would pay shoppers itself for injury or property damage claims under $1,000, which Amazon says account for more than 80% of cases, at no cost to sellers.

“We’re excited that these innovations create a more trustworthy shopping and selling experience for customers and sellers in our store,” the Seattle-based company said in the unsigned post.

Amazon has faced dozens of product-liability claims in recent years from people harmed by products sold by sellers on its marketplace. The debate over who is responsible for harm caused by such items escalated last month when the U.S. Consumer Product Safety Commission sued Amazon, seeking a court opinion that the company is on the hook for products sold by its sellers and must cooperate with the agency’s mandatory recalls.

In court cases, Amazon has argued that it’s not liable for damage caused by third-party products, saying the sellers are the retailer of record, even in cases when Amazon stored and shipped items for sellers based overseas who are out of reach of U.S. courts.

As part of its new policy, which takes effect Sept. 1, Amazon could also compensate shoppers for amounts larger than $1,000 if the seller “is unresponsive or rejects a claim we believe to be valid.” The company said the new policy goes “far beyond our legal obligations and what any other marketplace service provider is doing today to protect customers.”

Third-party sellers account for more than half the items sold on Amazon’s retail site. That roster includes established brands, crafts makers and hundreds of thousands of China-based manufacturers seeking a direct pipeline to shoppers in the world’s largest economy. As part of its new policy, Amazon said it would work to help sellers purchase their own liability insurance.

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