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U.S. regulator sues Amazon to force recalls of dangerous products

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Government safety regulators are suing Amazon, looking to hold the world's biggest online retailer accountable for ridding its site of unsafe merchandise sold by third parties.

The U.S. Consumer Product Safety Commission voted 3-to-1 to approve the administrative complaint filed against Amazon on Wednesday. It seeks to force the online behemoth to stop selling potentially hazardous items, to work with CPSC staff on recalls and to directly notify and offer refunds to those who purchased them. 

Amazon, for example, sold more than 24,600 faulty carbon monoxide detectors that failed to activate when the gas was present, and nearly 400,000 hair dryers without mandated devices to protect against shock and electrocution, the CPSC said. 

Night shirt sold exclusively on recalled on June 30 by Booph of Shenzhen, China. U.S. Consumer Product Safety Commission

Further, the e-commerce giant sold numerous sleepwear garments for kids that didn't meet federal flammable standards, CPSC stated. 

The merchandise was sold by third parties using Fulfillment By Amazon, a service that has the Seattle-based company storing and distributing the items for its sellers.

"We must grapple with how to deal with these massive third-party platforms more efficiently, and how best to protect the American consumers who rely on them," Robert Adler, acting chairman of CPSC, said in a statement.

Amazon said it agrees a framework is needed for the recall of third-party products and has been in discussions with the CPSC as a result, according to the company.

Amazon also said it takes prompt action to protect consumers when it is made aware of a safety issue.  

"For the vast majority of the products in question, Amazon already immediately removed the products from our store, notified customers about potential safety concerns, advised customers to destroy the products, and provided customers with full refunds," a spokesperson said in a statement to CBS MoneyWatch. "For the remaining few products in question, the CPSC did not provide Amazon with enough information for us to take action."

The CPSC acknowledged that Amazon had taken measures related to some of the named products, but deemed them to be insufficient.

Consumers are encouraged to visit to check for recalls before buying products online or in stores and to report any problems or injuries to the CPSC, the agency added.

The CPSC move prompted Senator Richard Blumenthal to bash Amazon for peddling unsafe offerings. "[Amazon] can't simply turn a purposeful blind eye to dangerous & defective products offered to unsuspecting customers," the Connecticut Democrat said in a tweet. "Looking the other way, while reaping billions, is reprehensible & irresponsible."

Amazon's large and expanding footprint in American retail is proving problematic for regulators and the legal system. Most of the unsafe products listed by the CPSC came from small, typically foreign firms offering products, at times exclusively, on Amazon's platform. 

As for the prospect of product-liability lawsuits related to items purchased on its site, Amazon has taken the stance that it is not liable for goods sold by third parties, as it is merely connecting those wishing to make a purchase and those looking to sell merchandise.

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