September 2, 2019
US senators press Amazon CEO Bezos for answers on product safety
Three Democratic senators asked Amazon CEO Jeff Bezos on Thursday to explain what the company is doing to prevent third-party sellers from selling dangerous, illegal and misleading products on its platform, and called on him to undertake "a sweeping internal investigation of your enforcement and consumer-safety policies."
"Unquestionably, Amazon is falling short of its commitment to keeping safe those consumers who use its massive platform," wrote Sens. Richard Blumenthal, Conn., Robert Menendez, N.J., and Edward Markey, Massachusetts, all members of the Senate Commerce Committee, in a letter asking for responses to a series of questions by Sept. 29.
This is the latest in growing list of congressional inquiries into the Seattle-based commerce giant, which, like other enormous tech platforms, is under increased government scrutiny.
The senators cite a Wall Street Journal investigation published last week that found some 4,152 items for sale on Amazon.com that federal agencies have banned or deemed unsafe, or that were deceptively labeled. The newspaper's report cited examples including an investigation by Washington state regulators that found dangerous levels of lead and cadmium in children's jewelry and school supplies sold by third-party sellers in 2017 and 2018.
When asked about the senators' letter, Amazon pointed to a previous statement issued in response to the report last week. In that statement, the company described safety as "a top priority" and said it had spent $400 million on product safety and compliance in 2018.
Amazon this year has touted the growth of third-party sales—Bezos himself highlighted their growing share of merchandise sales in his annual shareholder letter—in what some view as an effort to mollify antitrust concerns. Third-party sellers are also the source of a large and fast-growing revenue stream. They paid the company some $42.7 billion in commissions and fees last year.
In both the Washington state and Journal investigations, unsafe or mislabeled products brought to Amazon's attention were removed, but later reappeared for sale.
The senators pointed to magnetic toys that Amazon had restricted for sale in 2012, and which were declared a "substantial product hazard" by the Consumer Product Safety Commission. As part of the Journal report, some 80 listings for the dangerous magnetic toys which, if swallowed, can snap together causing internal organ damage—were still for sale by third-parties using the retail giant's systems to reach customers and deliver products.
Selling recalled items can result in civil penalties under federal law of up to $15 million, the senators wrote. They noted that it is the responsibility of individual sellers to ensure their products are legal. Amazon, in lawsuits stemming from the sale of faulty products by third-party sellers, argues that it is not liable because it isn't actually the seller.
But the senators cast doubt on that line of argument, noting that Amazon appears to have endorsed some faulty products because they were shipped from its warehouses or carried the "Amazon's Choice" label. Amazon, in its corporate risk disclosures, says the law governing liability in these cases hasn't been settled.
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