Summary of Court Judgment on Amazon's Fulfilled by Amazon Program (FBA) and Its Implications for the Jewellery Industry

Birmingham Assay Office Amazon Business AnchorCert Analytical World Jewellery Confederation - CIBJO

On July 31, 2024, I published an article titled "Ensuring Chemical Safety Compliance for Jewellery: Lessons from Amazon’s Legal Battle and the New General Product Safety Regulation (GPSR)" on LinkedIn. Following this publication, I received numerous messages from readers engaged in exporting jewellery and selling it online in the EU, UK, USA, and California, which has distinct regulatory limits for jewellery products. Responding to their requests, I have prepared a summary of the Court Judgment on Amazon's Fulfilled by Amazon (FBA) Program and correlated its impact on jewellery products and the forthcoming General Product Safety Regulation (GPSR), set to take effect in the EU on December 13, 2024. This summary should be read in conjunction with my previous article for a comprehensive understanding.

Case Overview

The U.S. Consumer Product Safety Commission (CPSC) recently ruled against Amazon.com, Inc., regarding its FBA program. The Commission cited substantial product hazards in children's sleepwear garments, carbon monoxide (CO) detectors, and hair dryers sold through the platform. The Commission held Amazon liable for failing to protect consumers adequately and mandated specific remedial actions.

Key Findings and Implications for the Jewellery Industry

1.?????? Amazon as a Distributor

• The CPSC deemed Amazon a distributor under the Consumer Product Safety Act (CPSA) due to its role in receiving, storing, and delivering products through the FBA program despite not taking title to the products.
• Implication: Jewellery manufacturers, importers, distributors, and other stakeholders, including economic operators, must recognise their similar position under both U.S. and EU regulations. The same logic could apply if the safety and quality of jewellery products are compromised, potentially leading to similar liability.

2.?????? Hazardous Products

• The CPSC identified non-compliant children's sleepwear (flammability issues), CO detectors (failure to detect carbon monoxide), and hair dryers (lack of immersion protection, posing electrocution risks).
• Implication: Jewellery, as a consumer product, falls under similar safety requirements. Rigorous testing and compliance measures are crucial to avoid liabilities similar to those faced by Amazon for hazardous products.

3.?????? Inadequacy of Amazon’s Notices

• Amazon's recall notifications were insufficient. They lacked critical terms like "recall," detailed hazard descriptions, and essential information such as the number of units recalled and sale dates. They also failed to reach secondary market consumers.
• Implication: Jewellery stakeholders must ensure comprehensive and clear communication in recall notices, addressing both initial and secondary market consumers to comply with regulatory expectations.

4.?????? Remedial Actions

• ?The CPSC ordered Amazon to issue full refunds for hazardous products upon return or proof of destruction and to offer replacements for CO detectors. Amazon must also develop notification and action plans detailing refund and replacement processes, quarantine and destruction of returned products, and progress reports.
• Implication: Similar obligations could be imposed on jewellery distributors and manufacturers. Establishing robust remedial action plans is essential for regulatory compliance and consumer safety.

5.?????? Commission’s Authority and Constitutional Challenges

• The CPSC’s authority to mandate recall notices and remedial actions was upheld, rejecting Amazon’s constitutional challenges regarding the Takings Clause and compelled speech under the First Amendment.
• Implication: Jewellery stakeholders must be aware of regulatory authorities' power to enforce compliance and should prepare to meet such requirements proactively.

6.?????? Due Process and Fair Adjudication

• The CPSC dismissed Amazon’s due process claim, asserting that the combination of investigatory, prosecutorial, and judicial roles within the CPSC did not deny a fair adjudication.
• Implication: Ensuring adherence to procedural fairness in compliance processes is vital for jewellery stakeholders to avoid disputes and regulatory scrutiny.

Conclusion

The CPSC’s ruling against Amazon underscores the significant responsibilities distributors and economic operators bear under consumer product safety regulations. For the jewellery industry, this judgment is a critical reminder of the importance of stringent compliance measures. As the GPSR takes effect in the EU, manufacturers, importers, and distributors must stay informed and adhere to the new standards to ensure market access and maintain consumer trust.

By following the best practices outlined in my previous article and this summary, stakeholders can effectively navigate the evolving regulatory landscape and demonstrate their commitment to product safety and consumer protection.

?Disclaimer

This summary reflects my interpretation of the Court Judgment on Amazon and its implications. While I have taken care to ensure accuracy, readers are encouraged to review the full judgment and consult legal experts as needed. Neither my employer, the Birmingham Assay Office, nor I are responsible for any misinterpretations.

For a deeper understanding, I recommend reading my previous article titled "Ensuring Chemical Safety Compliance for Jewellery: Lessons from Amazon’s Legal Battle and the New General Product Safety Regulation (GPSR)."

Author:

Dippal Manchanda MSc CChem CSci FRSC

Technical Director & Chief Assayer (Birmingham Assay Office) & Chairman BSI STI/53 Committee - Jewellery & Horology