In dismissing an application for summary judgment a US supreme court found that the trial court may well decide that Amazon was liable as the ‘seller’ of a defective thermostat that was installed in premises and caused a fire resulting in damage.

Amazon alleged that all they did was to allow a third party seller to publish an offer on Amazon.com providing fulfilment by Amazon Logistics Services by which sellers send their inventory to Amazon for storage and delivery when purchased. The court had to deal with the matter in the light most favourable to the plaintiff, and found that there were possible reasons for the trial court in due course holding Amazon liable as sellers who have strict liability for retailing or distributing defective products.

The court said that there is no question that e-commerce has revolutionised the way people shop. E-commerce has displaced brick and mortar store fronts. The consumer goes to a website to look for a product in the same manner one would walk into a department store or order from an individual company on their website.

Amazon by its actions chartered its own course. The product is virtually or perhaps physically on the Amazon shelf. While Amazon disclaimed title of these stored items, it maintained possession of the subject product. An Amazon employee handles the product once the consumer makes the decision to purchase. Amazon sets the rules of the transaction through which the consumer purchases the item. If a consumer has a problem with the product, it is Amazon that they contact. It is Amazon that demands indemnification in their services agreement. Amazon therefore has all the benefits of the traditional brick and mortar store front and that must carry responsibilities.

The issue has not yet been decided by the federal courts and this is only a summary judgment application but it gives some idea as to courts’ thinking in regard to e-commerce transactions.

Under the South African Consumer Protection Act it is a defence against strict liability 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 State Farm Fire & Casualty Co v Amazon.com Services Inc 2020.