Amazon Defeated in Court but investors are not worried

Amazon, the world’s largest online retailer, has recently been cut down in size as they face a battle in the Federal Appeals court. After hours on Wednesday, saw the company announce that a Federal Appeals Court judge has ruled against the American Giant in a product liability case that could change the way the retailer operates.
The third U.S circuit of appeals in Philadelphia concluded on Wednesday that Amazon may be held legally responsible while operating as an online marketplace for third party products. Heather Oberdorf a Pennsylvanian woman recently took to suing the company, after a product she purchased from the website malfunctioned. The Dog collar Oberdorf purchased malfunctioned and cause a retractable leash to hit her in the eye causing a minor injury.

In a ruling by the courts, the Judge stated that in accordance with U.S tort law, in the case of online sales, Amazon is a “seller” in the transaction, and as a seller, the company is subject to the laws covering liability in Pennsylvania. The liability laws that are in place in the state are a lot stricter in relation to other states in the U.S. The most recent ruling directly goes against the grain of other similar lawsuits related to third party merchandise sold on Amazon, with a number of other U.S courts siding in favor of the Company. Recently two Federal appellate courts, threw the case out stating that Amazon held no liability for what others were selling on their site.

Amazon representatives have been unavailable for comment on the most recent ruling, however shareholder responses speak volumes. Investors in the online retailer do not seem overly worried by the ruling, although the share price did see a small decline in after-hours action. The move by the U.S court to place liability on Amazon could see the company having to take more action regarding the process in which listings can be made on their site, however this should not be something that worried investors just yet.

Caroline Fields – IEC International

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