As consumers increasingly turn to online marketplaces for their shopping needs, the extent to which those marketplaces can be held liable for products sold by third parties on their platforms could affect the e-commerce landscape. With respect to liability for intellectual property infringements by third-party sellers, there is a wealth of case and statutory law to provide guidance for the operation of online marketplaces, but products liability cases present somewhat murkier territory. Prior to 2019, courts around the country consistently held that e-commerce platforms were not liable for injuries caused by products sold on their platforms, finding them to be mere facilitators of third-party transactions. More recently, however, their potential liability is less clear. This article examines this shift in order to provide guidance as to how companies may be able to limit future potential liability.
The Prior Liability Landscape
Consumers have long been able to hold those in the supply chain, including sellers, liable for injuries incurred due to defective products. See MacPherson v. Buick Motor Co., 217 N.Y. 382, 389-90 (1916); Restatement (Second) of Torts, Section 402A. But earlier cases largely did not address whether e-commerce platforms—which host product listings by third parties—could be held liable as sellers or some other part of the supply chain. Up until early 2019, the limited jurisprudence unanimously held that online marketplaces such as Amazon and eBay, much like shopping malls renting space to retailers, likely could not be held liable for injuries caused by products sold by third-party vendors on their platforms. See, e.g., Carpenter v. Amazon.com, 17-cv-03221, 2019 WL 1259158, at *5 (N.D. Cal. March 19, 2019) (holding that Amazon’s conduct was not a “necessary factor” in bringing defective hoverboards to consumers because the market would have otherwise existed); Eberhart v. Amazon.com, 325 F. Supp. 3d 393, 398 (S.D.N.Y. 2018) (holding that Amazon was not within the coffeemaker’s chain of distribution as it did not take title to the defective product).