By Pat Cunnane
The convenience of online marketplaces like Amazon has revolutionized how we shop, offering an unparalleled array of products at our fingertips. Yet, beneath this veneer of limitless choice lies a significant and dangerous flaw: When a product sold by a third-party seller proves hazardous, these platforms too often dodge the responsibility for recalls, leaving consumers vulnerable and recalls ineffective.
The "loophole" that historically allowed marketplace giants to sidestep accountability stems from their legal argument that they are merely "platforms" or "intermediaries," not the direct "sellers," "manufacturers," nor "distributors" of those products. This traditional interpretation of product liability laws, designed for a brick-and-mortar world, allowed them to claim they were just providing a virtual venue for transactions, much like a classifieds section. This stance has, for too long, created a gap in consumer safety. Importantly, marketplace retailers charge the sellers a fee, making a profit from each sale made on their platform.
A system ripe for exploitation: The FENGQS example
This isn't a theoretical problem; it's a daily reality for consumers and regulators. When a faulty e- bike battery or a defective helmet — critical safety items — is sold by a third-party, tracing the liable party often becomes an impossible quest. Sellers disappear, are based overseas, or are simply untraceable or uncooperative with the CPSC, leaving consumers with dangerous goods and no recourse.
Consider the recent and alarming warning in Bicycle Retailer and Industry News last week issued by the U.S. Consumer Product Safety Commission (CPSC) regarding the FENGQS F7 Pro e-bike battery. Published on June 18 the CPSC urged consumers to immediately stop riding these e-bikes due to severe fire and burn hazards, posing a risk of "serious injury or death." About 180 of these e-bikes, equipped with defective lithium-ion batteries, were sold directly on Amazon.com from May 2024 through December 2024. Despite nine reports of fires, including two causing property damage totaling $12,000, the Chinese manufacturer, Shenzhen Fengqisi Car Industry Co. Ltd., has refused to agree to an acceptable recall. This leaves consumers who purchased these dangerous products from Amazon in a perilous limbo, reliant solely on CPSC warnings they may never see.¹
The core of the argument is simple: profit implies responsibility. Amazon and other marketplaces earn a profit from every sale on their platforms, regardless of the actual seller. This direct financial gain should come with an inherent obligation to ensure product safety. It's disingenuous to profit from a sale and then disclaim responsibility when that sale endangers lives.
Cracks in the liability shield
Fortunately, the tide is turning. There are increasingly significant cracks appearing in the marketplace's long-held defense:
CPSC actions: The CPSC is leading the charge. In a landmark decision in July 2024, the CPSC unanimously found Amazon legally responsible for the recall of certain products sold by third-party sellers through its Fulfilled By Amazon (FBA) program. The CPSC determined that Amazon acts as a "distributor" in these cases, compelling it to notify the public and remove hazardous products. *Amazon has filed a lawsuit in federal court challenging the CPSC's determination and orders, arguing that it is a third-party logistics provider, not a distributor. This means the case is now moving through the judicial system, and the details of the CPSC's legal arguments and Amazon's defense will likely become more apparent as the complaint and answer is filed. It will also be interesting to see whether the Department of Justice defends the CPSC's decision, given the administration's stated concerns about overreach by federal agencies.*²
State court rulings: Some state courts are also stepping up. Rulings, such as in California's Bolger v. Amazon.com, have indicated that Amazon's active role in facilitating sales — processing payments, handling logistics, promoting products — makes it more than just passive intermediaries.³
Legislative efforts: While comprehensive legislation solely focused on marketplace recall liability hasn't yet passed, broader efforts aim to increase transparency and accountability. The INFORM Consumers Act now requires marketplaces to obtain and disclose information from high-volume sellers.⁴ Additionally, bills like the Consumer Safety Technology Act (H.R. 4814), which passed the House and is now with the Senate, seek to empower the CPSC with new tools to identify and track hazardous products.⁵
Time for accountability
Placing recall responsibility squarely on the shoulders of marketplaces would not only lead to more effective recalls but would also create a powerful incentive for these platforms to prioritize product safety proactively. Faced with direct financial and reputational consequences, marketplaces would be compelled to implement stricter vetting processes for third-party sellers, demand higher safety standards, and invest in better internal mechanisms for identifying and removing dangerous products before they ever reach a consumer's hands. This shifts the burden from the consumer who often has little recourse against a faceless, distant seller to the powerful entity that facilitates the transaction.
The current landscape of product recalls on online marketplaces is inadequate and dangerous. The logic is clear: Those who profit from the sale and possess the essential buyer and seller data are best positioned to execute effective recalls. Regulators must step up and mandate that Amazon and all other online marketplaces accept their moral and operational responsibility for product safety. It's not just about fairness; it's about protecting public health and safety in a digital world.
Sources
¹ "CPSC Warns Consumers to Immediately Stop Using FENGQS E-Bikes Due to Fire and Burn Hazards; Risk of Serious Injury or Death; Sold on Amazon.com." Bicycle Retailer and Industry News, June 18, 2025.
² "CPSC Issues Decision and Order on Fulfilled by Amazon Products." Consumer Federation of America, Jan. 17, 2025. This press release details the CPSC's July 2024 ruling and its implications. See also: "Amazon Files Suit against CPSC, Challenging CPSC's Determination That Amazon Is a Distributor." LawBC.com, March 20, 2025.
³ "California Supreme Court has denied Amazon's Petition for Review in Bolger v. Amazon." CaseyGerry Personal Injury Trial Lawyers. This article discusses the Bolger v. Amazon.com ruling and its significance.
⁴ "Understanding the INFORM Consumers Act." Shopify Help Center. This provides an overview of the INFORM Consumers Act and its requirements.
⁵ "H.R.4814-118th Congress (2023-2024): Consumer Safety Technology Act." Congress.gov. This source provides the legislative status and summary of the Consumer Safety Technology Act.
Patrick J. Cunnane is the founder of Stoker Strategies, a consulting business helping business leaders with their businesses. He has decades of experience as a CEO and has been active on trade issues for the past 35 years, including testifying to the USTR on the 301 Tariffs and de minimis.
