Amazon Suit Challenges Product Safety Watchdog’s Constitutionality

Amazon has filed a lawsuit in response to a regulator’s ruling governing product recalls.

The U.S. Consumer Product Safety Commission (CPSC) in January found that Amazon was responsible for the recalls of items sold on its site. The commission had found last year that Amazon was a “distributor” of faulty products.

But as The Associated Press (AP) reported, Amazon’s suit — filed March 14 — argues that it acts as a “third-party logistics provider” and thus should not be held liable for recalls of products made and sold by those third parties.

The CPSC filed a complaint against Amazon in 2021, alleging the company was  distributing unsafe third-party products through its logistics network.

The company countered by saying the commission had no legal standing to bring the suit, arguing in a court filing that federal law does not allow the CPSC to sue a company “if it is acting as a third-party logistics provider rather than a distributor.”

In its new suit, Amazon said it had issued recall notices and some refunds shortly after the CPSC raised safety concerns years ago. The suit also argues the regulator is an “unconstitutionally structured agency” that overstepped its authority with its January directive.

“The remedies ordered by the CPSC are largely duplicative of the steps we took several years ago to protect customers, which are the same steps we take whenever we learn about unsafe products,” Amazon said in a statement sent to the AP, declining to comment further.

The suit comes one month after the U.S. Department of Justice (DOJ) said it would no longer support the independent status of the CPSC and two other regulators: the National Labor Relations Board (NLRB) and the Federal Trade Commission (FTC).

The DOJ is challenging a Supreme Court precedent set nearly 90 years ago, giving certain independent agency commissioners job security, so that they can only be removed for cause rather than at the president’s discretion. The department plans to ask the high court to overturn that ruling.

However, the DOJ now intends to ask the Supreme Court to overturn that ruling as it applies to regulators who exercise “substantial executive power,” Acting Solicitor General Sarah Harris wrote in a letter to Sen. Dick Durbin, D-Ill., of the Senate Judiciary Committee.

In other Amazon news, PYMNTS wrote last week about efforts by the company — and rival Walmart — to employ artificial intelligence (AI).

“Amazon is focusing on customer engagement and automation while Walmart leverages AI for merchant efficiency and product sourcing,” that report said. “Meanwhile, Amazon’s privacy changes in its smart device lineup underscore the broader debate surrounding consumer data rights in an AI-driven world.”