US regulator sues Amazon for selling dangerous products to customers

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The US Consumer Product Safety Commission (CPSC) has filed a lawsuit against Amazon, accusing the e-commerce giant of selling hazardous products to its customers.

Among the products cited in the suit by the federal safety watchdog are carbon monoxide detectors that fail to alarm, numerous children’s pajamas that could catch fire and nearly 400,000 hair dryers that could electrocute people if dropped in water.

The CPSC, which had in the past only pulled its punches rather than push a court fight with companies it believes sell dangerous products, says cracking down on Amazon is the only way to keep consumers safe from these products.

“Today’s vote to file an administrative complaint against Amazon was a huge step forward for this small agency,” says Acting Chairman Robert Adler. “But it’s a huge step across a vast desert — we must grapple with how to deal with these massive third-party platforms more efficiently, and how best to protect the American consumers who rely on them.”

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CPSC said the world’s number one online retailer needs to take responsibility for the safety of customers that buy products from its website.

The products cited are not sold directly by Amazon (AMZN), according to the agency. They are sold by third parties using Amazon’s platform. Many of those companies that sell the dangerous products cited by the consumer watchdog are foreign, and the agency has limited ability to force a recall of their products if they are found to be hazardous.

Last year, Amazon reportedly collected $80 billion in commissions and other payments by third-party sellers as third-party sellers account for more than half the physical goods sold on Amazon.com.

The complaint concedes that Amazon did stop selling the products when notified by CPSC staff, and that it notified buyers of the products of the hazard and offered them cash refunds. But the complaint says “Amazon’s unilateral actions are insufficient to remediate the hazards posed by the … products.”

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The consumer watchdog wants to force Amazon to stop selling the products in question, to work with CPSC staff on a recall of the products and to directly notify consumers who purchased them about the recall and offer them a full refund.

But Amazon said it takes prompt action when it is made aware of safety problems with products sold on its website, either by Amazon or third-party sellers. The company said any products that were probably not recalled was because “CPSC did not provide them with enough information to take action and despite requests. It said it offered CPSC to expand its capabilities to handle recalls for products.

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“We are unclear as to why the CPSC has rejected that offer or why they have filed a complaint seeking to force us to take actions almost entirely duplicative of those we’ve already taken,” Amazon said in a statement, Thursday, July 15.

In January this year, the office of the United States Trade Representative (USTR) added several Amazon.com websites in Europe to the U.S. list of “Notorious Markets” for counterfeiting and piracy.

The list, which is updated annually, identifies e-commerce websites and companies deemed to be facilitating the sale of counterfeit goods and engaging in intellectual property violations or piracy.