Appeals court rules Amazon can be held liable for third-party products

In a blow to Amazon, a U.S. appeals court ruled that the mega-retailer can be held accountable for faulty third-party sales. The ruling arrived this week via the 3rd U.S. City Court of Appeals in Philadelphia, running counter to a past lower court ruling that had come out in Amazon’s favor.

If upheld, the ruling could have a big impact on the way the company does business. Nearly half of the items sold through the site are handled by third-party sellers. That accounted for around $11 billion in Amazon’s revenue for the previous quarter.

The ruling is in line with Pennsylvania law — liability for products often varies from state to state. Resident Heather Oberdorf sued the company in federal court back in 2016 over a retractable dog leash that snapped, breaking her glasses and causing permanent loss of vision in her left eye.

“It’s gratifying that the 3rd Circuit agreed with our argument and recognized that the existing interpretation of product liability law in Pennsylvania was not addressing the reality, the dominance that Amazon has in the marketplace,” Oberdorf’s lawyer told Reuters.

Amazon has yet to comment on the case, but it seems likely the company will ultimately appeal the ruling. A lower court will rule on whether the leash that caused Oberdorf’s injury was, indeed, defective.