Third-party seller: Court ruling against Amazon may kill its business model

A federal court ruling that Amazon.com Inc. can be held liable for a dog collar sold on its website that partly blinded a woman could complicate the online merchant’s business if it is applied broadly.

The Third Circuit Court of Appeals, in Philadelphia, overturned a judge’s decision that Amazon was shielded under the Communications Decency Act, which protects online businesses from lawsuits over the postings of their users.

It’s the first federal appeals court to hold that Amazon is a product “seller” that can be held liable under state law for sales on its marketplace.

That is so, the court said in a divided ruling on Wednesday, “even though the products are sourced and shipped by third-party vendors.” It found that “Amazon’s involvement in transactions extends beyond a mere editorial function; it plays a large role in the actual sales process.”

Amazon India