Executive Summary
The convenience of online commerce has resulted in its rapid growth over the past decade. As the popularity of shopping online continues to grow, product liability and consumer product safety laws in the U.S. that are designed to protect shoppers have not yet caught up to the evolving marketplace, potentially leaving consumers vulnerable when they shop online.
As a result of this gap, consumers have encountered dangerous or recalled products for sale in digital marketplaces by third-party sellers who may be unavailable or otherwise unaccountable for harms caused by their products. In 2023, the eSAFE team at the Consumer Product Safety Commission requested the removal of more than 50,000 hazardous products found online. A 2019 Wall Street Journal investigation found unacceptable lead levels, suffocation hazards, and other safety failings across a variety of children’s products purchased on Amazon. Similarly, CNN found that fake and dangerous products were being sold by third-party sellers on Amazon’s marketplace. With access to millions of products at any moment, consumers are more likely than before to encounter unsafe consumer products that may put them at unreasonable risk of injury and death.
Consumers should be able to buy products online that do not pose unreasonable risks to their health and safety, and digital marketplaces play a key role in making this a reality. Digital platforms that offer marketplaces should provide consumers with adequate and accurate information to help them make informed buying decisions. Platforms should also work to better ensure the safety of all of their products by thoroughly vetting and monitoring third-party sellers and their offerings. If things go wrong, platforms should also be ready to respond quickly to make consumers whole. Unfortunately, today’s e-commerce ecosystem falls short of these basic expectations, but lawmakers and regulators have an opportunity to act and help create safe and fair online marketplaces.
Today’s product liability and safety laws in the U.S. can be applied to in-person and online retailer, and may hold them liable for product defects they sell directly to consumers. However, these laws still need to be updated to clarify when digital marketplaces should be held accountable for consumer products sold by third-party sellers on these sites.
Understandably, industry participants and policymakers may be wary of applying a one-size-fits-all legal or regulatory solution to the diverse range of existing and emerging digital marketplaces. As such, it is important that policymakers closely consider the differences among digital platforms that host third-party sellers, including the nature of the marketplace and the level of control and influence the platform exerts throughout the transaction. Policymakers should determine how to hold digital marketplaces accountable for potentially harmful products that are sold by third-party sellers.
This report was written by Oriene Shin, Manager, Safety Advocacy, and Laurel Lehman, former CR policy analyst, with contributions from Justin Brookman, Director of Consumer Privacy and Technology.