On 12th January 2022, Amazon announced its Great Republic Day Sale starting January 17th, featuring bumper deals across smartphones, TVs, electronics, and large appliances.
These sales always drive a huge volume of transactions for the e-commerce giant, aided by the millions of retailers who provide the actual products. However, when the number of products exchanging hands increases, so does the risk of some of them being faulty or defective.
Historically, Amazon has had its share of bad luck in this regard. It has facilitated the sale of:
- A dog leash that snapped back and blinded a woman
- A defective hoverboard that caused a fire
- Lakhs of hair dryers without shock-protection mechanisms
In fact, in 2016, a Chandigarh resident lodged a complaint against the platform in the District Consumer Disputes Redressal Forum after buying a mobile phone that turned out to be defective within two months.
So is Amazon liable to compensate consumers in these cases?
Not in India.
Amazon’s contention is that it doesn't actually sell the products- it merely provides an online marketplace for independent third-party sellers and buyers. And as such, their sellers are expected to have the proper mechanisms to deal with faulty products.
The mechanism in question is Product Liability Insurance. This policy helps sellers pay monetary compensation to any consumer who suffers bodily injury, illness, property damage, or accidental death due to the company’s product(s).
Product Liability Insurance can also cover product recalls where the manufacturer is forced to request customers to return already sold items in order to avoid further harm.
With the help of this Insurance, sellers can also cover any legal or defence costs in the event of lawsuits levelled against them for their defective products.
In the US, Amazon has rolled out a plan to compensate customers themselves in cases of faulty products. However, Indian sellers are currently on their own.