E-COMMERCE: AMAZON HELD LIABLE FOR DAMAGES CAUSED BY DEFECTIVE PRODUCT SOLD ON ITS ONLINE MARKETPLACE
With the historical decision Cal. Ct. App., 4th District, No. D075738 – Bolger vs Amazon.com LLC (Fully available at the following link: https://law.justia.com/cases/california/court-of-appeal/2020/d075738.html) on August 13, 2020, the Fourth Section of the District Court of Appeals of the State of California stated for the first time that the e-commerce company is liable for defects and damages caused by products sold on its marketplace.
The case originates from the purchase on the Amazon online marketplace, made by Ms. Angela Bolger, of a spare battery for a laptop. The item at issue was ordered from the seller Lenoge Technology (HK) Ltd and accepted by Amazon itself, which handled, processed and finalized the delivery to the buyer. A few months after the purchase, the battery turned out to be defective, resulting in an unexpected explosion that caused serious injury to the woman’s body. The latter sued Amazon and the third Lenoge seller – who remained in absentia – in order to claim restitution of the amount paid for the purchase of the product and a substantial compensation for the damage suffered. In the first instance, the U.S. Judges upheld Amazon’s defense, pointing out that the company is a simple “online marketplace” but does not manufacture, distribute or market the product at issue directly. As a result, the Judges concluded, nothing can be imputed to them in relation to the defectiveness of the product. The judgment of first instance was followed by the appeal, in which the initial decision was completely overturned on the basis of a motivation – at the moment unique in the global legal scenario – which identifies a clear responsibility also towards the e-commerce marketplace.
THE LOGICAL-LEGAL REASONING OF THE COURT
Despite what was stated in the first instance, in the judgment of the U.S. Court of Appeals Amazon is identified as a real intermediary figure between the third seller on the one hand (Lenoge Technology) and the final buyer on the other (Ms. Bolger). In fact, the importance of Amazon within the product distribution chain is highlighted, beyond the mere terminological qualification that can be attributed to it as a simple “intermediary”, “facilitator” or real “distributor”. The most important elements that define the logical-legal reasoning developed in the second instance procedure concern the fact that Amazon has authorized the seller to offer its products for sale within the e-commerce marketplace, thus providing the digital space necessary for the offer to the consumers. Moreover the product at issue has remained stored in one of the c.d. “fulfilment center” by Amazon and subsequently sent from this last one to the buyer. In fact, according to what asserted by the U.S. Court of Appeal, since the beginning the buyer has never had a direct connection with the third seller, interacting simply and only with a single subject, that is the e-commerce marketplace. In addition, a further element highlighted by the Court concerns the payment made for the purchase of the product: specifically, it is pointed out that the transaction itself did not involve the third party seller, who remained totally unaware of what was purchased until Amazon itself decided to forward an official communication. Based on these multiple elements, the Court of Appeal comes to affirm that Amazon is “an integral part of the entire production and distribution complex that should sustain the course of the injuries resulting from defective products”. In fact, in the eyes of the consumer, Amazon is the real seller of the product, the real player of the sales process and, therefore, since it is a fundamental contribution, full liability cannot be excluded in case of defective product sold on its e-commerce marketplace.
The decision at issue is a real “unicum” and could pave the way for similar decisions on the subject of the liability of the online seller towards the consumer for defective products sold on its marketplace. In this regard, it should be duly highlighted the fact that this decision has been pronounced in the United States, where it is particularly frequent and consolidated the use of jurisprudence to address deficiencies from the interpretation point of view and to try to classify from the regulatory point of view the new figures and commercial methods increasingly used in everyday life.
However, in trying (as far as possible) to transpose the Californian Court’s ruling at European level, nowadays it would seem unlikely to accept such an innovative interpretation. It is currently strongly consolidated, in both doctrine and jurisprudence, the legal figure of the so-called “provider”, a category within which can be traced the so-called marketplace giants such as, among others, Facebook, Ebay and Amazon itself. These service providers, pursuant to art. 15 of Directive 2000/31 EC (so-called “Directive on electronic commerce”), transposed into our legal system by Legislative Decree no. 70 of 2003, are not required to fulfill a “general obligation to monitor the information which they transmit or store, nor a general obligation actively to seek facts or circumstances indicating illegal activities”, being required to “inform without delay the competent public authority of alleged illegal activities or information provided by the recipients of their services or to communicate information that allows the identification of recipients of their services”. It is clear, however, that the current regulation on this point, if carefully examined, does not include the case dealt with by the Californian Judges , which refers to the seller’s liability for defective products and not to the performance of illegal activities, as stated in the aforementioned regulation. This undoubtedly suggests the innovative approach of the Californian Court of Appeals, which could lead to the identification of a new legal figure even in Europe, completely different from the simple notion of “provider” and able to fully regulate the relationship that increasingly often now arises between the simple customer-buyer on the one hand and the giant marketplaces on the other, real active players in product sales procedures. In any case, while waiting to know if there could be, actually, a real regulatory evolution in this sense, it is unrealistic that such an evolution could be accepted overseas and introduced at a regulatory level without the essential intervention of the European legislator.
 On this matter, see the original text of the decision, which states that “Amazon is an integral part of the overall producing and marketing enterprise that should bear the cost of injuries resulting from defective products.” (Vandermark, 61 Cal.2d at p. 262).