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Amazon can be held liable for third-party seller products

Certain third parties also sell products using our services and stores that may increase our exposure to product liability claims, such as if these sellers do not have sufficient protection from such claims.
-- Amazon Annual Report

The 3rd U.S. Circuit Court of Appeals overturned a lower court decision that Amazon cannot be held liable for damages resulting from products sold by third-party vendors, on its marketplace.

Section 402A specifically limits strict products liability to "sellers" of products. Amazon relies on this limitation as its defense, claiming that it is not a "seller" because it merely provides an online marketplace for products sold by third-party vendors. We disagree.
-- Circuit Judge Jane Richards Roth

Section 402A is Pennsylvania law, so this ruling does not apply directly to the other 49 states, but the product liability writing is on the wall, as Amazon has previously noted in its financial reports under "Risk Factors".