Amazon, Marketplaces, and Third-Party Sellers: Who’s Liable Now?

At GetCompensation.law, we see firsthand how consumer injuries from defective products purchased online can leave families with mounting bills and few answers. With the convenience of platforms like Amazon, eBay, Walmart.com, and Etsy, shoppers can order virtually anything from the comfort of home. But with this convenience comes a legal question that’s far from settled: Who is responsible when a defective or dangerous product bought through an online marketplace causes injury?

Traditional product liability law was built around brick-and-mortar sales. If you purchased a defective toaster from a local retailer, you could typically sue both the manufacturer and the store that sold it. Courts applied strict liability, holding sellers accountable regardless of whether they directly caused the defect.

But the marketplace model has blurred those lines. When you buy from Amazon, is Amazon really the “seller”—or just a platform? And if a third-party vendor ships a defective product, can the injured consumer hold the marketplace responsible?

How Marketplace Sales Actually Work

To understand the liability question, it helps to look at how third-party sellers operate on Amazon and other platforms:

• Fulfilled by Amazon (FBA): The seller sends inventory to Amazon’s warehouses, and Amazon handles packaging, shipping, and returns. Consumers often don’t realize they are buying from a third-party vendor, since everything appears “Amazon-branded.”
• Fulfilled by Merchant (FBM): The seller lists on Amazon but ships directly to the customer. Amazon only processes the payment and provides the platform.

This distinction is critical because courts often weigh Amazon’s degree of control over the transaction when deciding whether strict liability applies. If Amazon stores, ships, and controls refunds, many judges see it as stepping into the role of a traditional retailer.

Strict Liability and Its Modern Challenges

At the heart of these disputes lies the principle of strict liability, which ensures that sellers and manufacturers bear the costs of injuries caused by defective products, rather than unsuspecting consumers.

Courts across the U.S., however, are divided on whether online marketplaces should fall under this traditional framework:

• Some states treat Amazon as a seller. In California, a landmark 2020 case held Amazon strictly liable for a defective laptop battery that caused severe burns. Courts reasoned that Amazon was deeply involved in the sale, storing the product and controlling the financial transaction. Similar reasoning has been used in Texas and Wisconsin.
• Other states let Amazon off the hook. Courts in Ohio, Tennessee, and Maryland have ruled that Amazon is not a seller but rather a service provider, limiting liability to the third-party vendor. These rulings leave consumers in a bind when the seller is anonymous, overseas, or insolvent.

This patchwork approach means your rights can depend heavily on where you live and where the lawsuit is filed.

Real-World Examples of Injuries

The dangers of defective marketplace products are not hypothetical. They’ve shown up in headlines across the country:

• Exploding electronics: From hoverboards to laptop batteries, poorly manufactured devices from overseas vendors have caused fires, burns, and property damage.
• Unsafe children’s products: Toxic lead paint in toys, defective car seats, and choking hazards have slipped through weak oversight of third-party listings.
• Faulty household items: Extension cords, pressure cookers, and kitchen appliances have sparked electrical fires or failed catastrophically.

In many of these cases, victims first tried to pursue the overseas seller—only to discover the seller disappeared or was judgment-proof. That left Amazon or the marketplace as the only realistic source of compensation.

Amazon’s Legal Defense Strategy

Amazon has consistently argued that it is not the legal “seller” of third-party products. Instead, it positions itself as a service provider, facilitating transactions while disclaiming responsibility for defects.

Yet, Amazon also benefits financially from every sale, controls the flow of money between buyer and seller, and in many cases even handles storage and shipping through its FBA program. Courts have taken note of these factors when deciding whether Amazon’s role is more than just passive.

In response to public pressure, Amazon has rolled out limited compensation programs, promising up to $1,000 for injuries from defective products. But for serious injuries that can involve tens of thousands or even millions of dollars in damages, these programs fall far short of true accountability.

Why State Splits Matter for Consumers

Because there’s no single nationwide rule, consumers face uncertainty. The same defective product could lead to very different legal outcomes depending on jurisdiction. For instance:

• In California, an injured consumer may have a strong claim against Amazon itself.
• In Florida, liability may rest solely with the third-party seller—who may be hard to track down or beyond the reach of U.S. courts.
• In New York, courts are still divided, and outcomes depend heavily on case-specific facts.

This creates a risk gap for consumers in certain states, undermining the purpose of product liability law, which is to ensure injured parties aren’t left without a remedy.

Injuries from Marketplace Purchases: What to Do

If you’ve been injured by a defective product purchased through Amazon or another online marketplace, here are practical steps to protect your rights:

1. Preserve the product and packaging. These items are key evidence in proving the defect.
2. Document the injury. Take photos, keep medical records, and write down details about how the injury occurred.
3. Identify the seller. Check your order history to see whether the product came directly from Amazon or a third-party vendor.
4. Report the issue. File a report with the marketplace—Amazon, eBay, Walmart, or Etsy—so there’s a record of your complaint.
5. Consult a product liability attorney. Because state laws vary, an attorney can evaluate whether you may have a claim against the marketplace, the third-party seller, or both.

Even if Amazon isn’t strictly liable in your state, attorneys may pursue claims under negligence, breach of warranty, or consumer protection statutes.

The Future of Marketplace Liability

The legal landscape is still evolving. Several cases are pending before state supreme courts and federal appellate courts, and Congress has occasionally floated proposals to clarify marketplace liability.

Consumer advocates argue that marketplaces profit like traditional retailers and should bear the same responsibility, especially since many third-party vendors are overseas and unreachable. On the other hand, marketplaces warn that broad liability could stifle e-commerce and raise costs.

Legal scholars believe we may eventually see a federal standard that brings clarity, but until then, consumers face a patchwork system. Attorneys are on the frontlines pushing courts to adapt old laws to modern commerce.

Why Legal Representation Matters

Insurance companies and corporate giants like Amazon have teams of lawyers trained to minimize payouts or deny claims altogether. Injured consumers going it alone often find themselves at a disadvantage, especially when trying to pursue a seller outside the U.S.

An experienced product liability lawyer can:

• Determine whether your state courts have recognized Amazon or similar platforms as liable sellers.
• Identify all potential defendants, including manufacturers, distributors, and marketplaces.
• Pursue full compensation for medical expenses, lost income, pain and suffering, and long-term care.
• Navigate complex jurisdictional issues when sellers are located overseas.

Without strong legal representation, you risk being left with mounting bills and no accountability from the companies profiting from your purchase.

Final Thoughts

E-commerce is here to stay, and so are the questions about liability for dangerous products sold online. While some courts are moving toward treating Amazon and other platforms as sellers, others continue to shield them from responsibility. For consumers, this means uncertainty—but also an opportunity to fight for clarity and fairness in the courts.

If you or a loved one has been injured by a defective product purchased online, don’t wait. GetCompensation.law connects you with top-rated attorneys who will go to war against marketplaces, manufacturers, and insurers to secure the compensation you deserve.