(Bloomberg)—Amazon.com Inc., No. 1 in the 2021 Digital Commerce 360 Top 1000, was sued by the U.S. Consumer Product Safety Commission, which is seeking an order determining that the largest online retailer is legally responsible for defective products sold in its sprawling third-party marketplace.
The complaint filed on Wednesday says Amazon sold children’s sleepwear that failed to meet federal standards for flammability; some 24,000 carbon monoxide detectors that failed to activate when the harmful gas was present; and 400,000 hair dryers that risked shock and electrocution. Each of the products was sold by one of Amazon’s millions of third-party sellers, and all used a service called Fulfillment By Amazon, in which the company stores and distributes the products on behalf of its sellers.
After the CPSC notified Amazon of the defects, the Seattle-based company removed some of the product listings, notified customers that their goods presented a hazard, and offered a refund, but the actions were insufficient, the agency said in its complaint. Amazon “did not want to have this be called a recall, and they did not want to be considered legally responsible for these products,” CPSC spokesperson Joe Martyak said. “That’s the dealbreaker here. We think you are responsible for this.”
Amazon has faced a string of product liability lawsuits around the U.S. that seek to hold the company responsible for harm caused by items purchased on its marketplace. The company has argued it isn’t liable for the goods sold by outside vendors, saying it merely provides a service connecting buyers and sellers, and, in one case, likening itself to an auctioneer rather than a retailer.
“Customer safety is a top priority and we take prompt action to protect customers when we are aware of a safety concern,” Amazon spokesperson Mary Kate McCarthy said in a statement in response to the CPSC’s complaint.
Amazon took down listings for those products it was able to identify, advised shoppers to destroy them, and offered “to expand our capabilities to handle recalls” for products sold by both Amazon and its merchants, she said. “We are unclear as to why the CPSC has rejected that offer or why they have filed a complaint seeking to force us to take actions almost entirely duplicative of those we’ve already taken.”
The CPSC is best known for voluntary recalls of defective and dangerous products, in which the agency and a manufacturer or distributor agree on the outlines of a recall. It coordinates about 300 such recalls a year.
Actions like the complaint against Amazon are far rarer. Martyak said the CPSC has sued companies to seek to compel a recall just “a handful” of times in the past decade or so, including last week, when CPSC sued Thyssenkrupp Access, alleging defective residential elevators. In that instance, the company objected to the demand for a recall.
“We’re eager to work with them on this,” Martyak said of Amazon. “The door is still open as far as doing a recall on this.”
The complaint seeks a determination that Amazon is a distributor of consumer products under the Consumer Product Safety Act, and an order compelling the company to work with the agency to eliminate the risk to consumers of the defective products.
Amazon considered developing Alexa tracking device for children
Codenamed Seeker, the GPS-equipped device would be geared toward kids aged 4 to 12 and could take the form of a wristband, keychain or clip, according to documents reviewed by Bloomberg. The voice-activated wearable would provide access to Amazon’s children-focused content and let parents communicate with and monitor their kids.
Amazon was exploring the concept of the device in mid-2019 as part of its product roadmap for 2020, and it’s unclear whether the project moved forward.
The company has sought to develop various Alexa-enabled products targeting children. A wearable Disney gadget codenamed the Magic Band is scheduled to arrive this year, according to the documents. It’s unclear whether it’s a toy or is associated with the guest-tracking Magic wristband Walt Disney Co. has deployed in its parks and hotels.
The two companies already collaborate in various ways. Amazon’s cloud computing division powers the Disney+ streaming service, and, earlier this year, Amazon began offering its music service subscribers several free months of Disney+.
Amazon and Disney declined to comment.
Amazon had also planned to release an Alexa-powered karaoke microphone dubbed Jackson on Prime Day, but no such device was forthcoming during the two-day annual sale last month.
The e-commerce giant planned to sell the kid-focused Seeker wearable for $99, including wireless connectivity and a year’s access to the company’s FreeTime Unlimited subscription, which has since been rebranded Kids+. The subscription costs $2.99 per month for access to books, movies, television shows, apps and games aimed at children and lets parents set limits on screen time and filter content based on a kid’s age.
A child-oriented device would mark an expansion of Amazon’s ambitions in consumer hardware. Last year, the company released a fitness band called Halo that can track physical activity, sleep, body fat and the wearer’s mood. The company has also been working on a home robot.
Advocacy groups and lawmakers have in the past criticized Amazon’s privacy protections for devices aimed at children. In 2019, the Campaign for a Commercial-Free Childhood, now known as Fairplay, and the Center for Digital Democracy joined several other groups to file a complaint with the Federal Trade Commission. They argued that Amazon’s Echo Dot Kids Edition infringed on children’s privacy rights by collecting data without verifiable parental consent.
The complaint also said the company retained recordings from the devices indefinitely, unless a parent explicitly requested they be deleted, and said the process for reviewing what information the devices collected was burdensome. Several U.S. senators also called on the FTC to investigate whether Amazon had violated the Children’s Online Privacy Protection Act with the device. Amazon said at the time that it was compliant with the law and on its corporate website lays out the steps it has taken to protect the privacy of FreeTime subscribers.
In the fall of 2019, Amazon unveiled new privacy tools, including an opt-in feature that lets users automatically delete their Alexa recordings on a periodic basis. The privacy enhancements followed a Bloomberg report that thousands of Amazon workers around the world were reviewing audio clips collected by Alexa devices in an effort to improve their responses to commands.