Earlier this week, the results of a Wall Street Journal investigation into the availability of products known to be unsafe on the Amazon platform was released, and the results are creating new fodder for critics of the online retailer, and putting the company on notice that they are selling far too many defective products. .
The Results of the Report: Amazon Makes Money on 4,000+ Unsafe Products
In all, Amazon found 4,152 products available on Amazon that shouldn’t be available for sale anywhere. Some of the products had been declared unsafe by federal agencies, while others were improperly and deceptively labeled and still others have been banned by federal regulators. In fact, among these products included more than 150 Amazon claimed to have already banned. Some of the products contained unsafe levels of lead. Yet, they were still available for purchase trough the Amazon platform. Half of them were even being stored in Amazon’s warehouses. but were purchasable anyway and a children’s toy containing an unsafe quantity of lead. Nearly half were allegedly stored within Amazon’s own warehouses. The Federal Trade Commission was motivated by the report. In a Tweet, Federal Trade Commissioner Rohit Chopra said, ““This article raises real concerns about whether Amazon is profiting from widespread deception on its platform. Deceptive acts or practices can threaten our health and safety, and are unlawful under the FTC Act.”
Amazon Accepts Some Reponsibility, Rejects Some
Amazon didn’t dispure the findings in the article, but following the article’s release, Amazon removed many of the items specified. They also gave the Wall Street Journal credit for making the company aware of so many safety issues. Several consumer watchdogs noted that Amazon may be making a lot of money on its platform through widespread deception and possible fraud on the part of third-party vendors. In an Amazon blog post, the company recounted the steps it takes to vet all of the products it sells, and the third-party merchants that use their platform. They also asserted that the third-party merchants were ultimately responsible for selling the items cited in the article. According to the blog post, the company “invests significant resources to protect our customers and have built robust programs designed to ensure products offered for sale in our store are safe and compliant.” Lawmakers have already chimed in, which is no surprise since they have been increasingly critical of tech giants in recent months. Sen. Richard Blumenthal (D-CT), for example, said in a tweet that the company needs to “prioritize safety over profits.”
Regulators Should Do More
For many years, product safety regulators have been expressing concern regarding the proliferation of online platforms and discussing the difference in responsibilities, as compared to traditional brick-and-mortar retailers and manufacturers. If a store or a manufacturer knowingly sells or makes a defective and/or recalled product and fails to report it, the Consumer Product Safety Commission can step in and go after them. However, an online platform like Amazon falls under neither of those categories. That said, Amazon does claim it has regular discussions with the CPSC about product safety. The company is also a member of the CPSC retailer reporting program, which serves as something of an early detection system because they send consumer safety complaints as a kind of early detection system for defective products. To gain perspective on the extent of this problem, in 2018, third-party merchants accounted for 58% of physical gross merchandise sales on Amazon, the fourth year in a row where third-party sellers had more sales than Amazon’s first-party retail business., and the trajectory has been on the upswing since 1999. Obviously, something has to be done about this. A lot of the concern about this report has to do with Amazon’s seeming inability to control its huge platform. The CPSC wonders whether Amazon committed “widespread deception” by selling so many thousands of products without any warnings to consumers. This, despite the fact that federal agencies deeming those goods to be unsafe, deceptively labeled or banning them altogether.