A New Jersey court found that Amazon is not liable for a defective laptop battery it sold that caused a home to burn down.

The plaintiff bought a laptop battery using an Amazon account which was sold by a Hong Kong company. She left the battery charging on her bed and the house burnt down while she was away.

The question was whether Amazon was a ‘product seller’ under the state’s Product Liability Act. Amazon is generally involved in three types of transactions:

  1. the direct sale of its own Amazon-branded products to consumers;
  2. the sale of a product directly from a vendor to a consumer, with Amazon merely allowing the vendor to advertise the product and the consumer to order it; and
  3. the sale of a product from a vendor to a customer, with Amazon fulfilling the transaction by holding the product in its warehouse and shipping it to the consumer.

Amazon would almost certainly be a product seller for its role in the first transaction and likely would not be a product seller for the second transaction.

The third more doubtful category was examined by the court which found that Amazon may have technically been a part of the chain of distribution but it never exercised control over the product sufficient to make it a product seller under the Act. The agreements governing the relationship between the parties made it clear what the limits of Amazon’s control over the product was. The third party seller decides what to sell, sources the product, packages the product and complies with applicable laws. Amazon facilitates rather than drives the sale and does not act as a product seller.

For a transaction in South Africa, it is a defence under the Consumer Protection Act that ‘it is unreasonable to expect the distributor or retailer to have discovered the unsafe product characteristic, failure, defect or hazard, having regard to that person’s role in marketing the goods to consumers’.

The case is Allstate New Jersey Insurance Co. et al. v Amazon.com Inc.