ToplineAmazon announced Tuesday that it will pay compensation directly to customers who suffer injuries or property damage from defective goods sold by others via its platform. This is a departure form its current policies, as Amazon faces regulatory and court pressure over the safety of its products.Amazon has updated its policies regarding damages and third-party sellers. Getty ImagesThe Key FactsAmazon announced that it will pay personal injury and property damages claims of up to $1,000 directly starting September 1. The e-commerce giant stated that this will cover more than 80% in injury and property damage cases. It also said that sellers would not be charged if they adhere to its policies and have valid insurance. Amazon indicated that it may pay higher amounts for claims if sellers fail to respond or reject claims it considers valid. According to Amazon, the new policy will better protect sellers and customers. Amazon sells approximately half of its products from third-party sellers. However, the company maintains that it is a platform connecting buyers and sellers and is not responsible for the content of other sellers' products. Amazon stated that it is exceeding its legal obligations and doing what any other marketplace service provider does today to protect customers, and is not admitting liability.Important BackgroundAmazon is under increasing pressure to ensure that its products are safe and quality. People have claimed that they were injured by defective batteries, burned by hoverboards and blinded by dog leashes. Although several cases against Amazon have been filed recently, the company has mostly been protected from liability. It argues that it is an intermediary platform and therefore not a seller or distributor. The U.S. Consumer Product Safety Commission sued Amazon in July to have it recall defective products that could cause serious injury or death. These included 24,000 carbon monoxide detectors failing to alarm and 400,000 hair dryers not adequately protecting against electric shocks. The federal regulator referred to Amazon as a distributor.TangentAccording to the Wall Street Journal, third-party sellers also reach out to unhappy customers to get them to remove their negative feedback. This is a violation of Amazon's terms of service, and it adds to the fake reviews epidemic.Continue readingAmazon will pay damages to independent merchants who sold dangerous goods (FT)Amazon's Escape from Liability for the Most Risky Products It Sells (Verge).Negative Amazon Reviews Get Hunted Down by Some Sellers (WSJ).
