Amazon will start paying customers who are impacted by dangerous goods sold by third-party merchants on its US platform in a move that could reduce litigation.
The ecommerce giant today said it will start offering compensation for personal injury or property damage of up to $1,000, effective from 1 September.
Amazon added it may step in to offer further support if sellers are unresponsive.
The online retail giant has faced a string of lawsuits from customers arguing it is liable when a third-party merchant sells dangerous products through its platform.
In 2016 a woman in Pennsylvania sued the company after she was blinded when a retractable dog lead she bought on the site snapped.
Amazon maintains that sellers themselves are responsible, but said the new policy “better protects Amazon customers and sellers”.
More than half the products sold on Amazon now come from third-party sellers, though the company still stores and ships many of these through its fulfilment programme.
While this has expanded the number of products available on its site, it has also opened the door to greater criticism as the tech giant is unable to validate the quality of the goods.
Amazon said the $1,000 limit would cover 80 per cent of injury and damage cases on its platform, adding that there would be no cost to sellers.
While the policy change will initially only come into effect in the US, it will soon be expanded to other areas.
The company today also unveiled Amazon Insurance Accelerator — a network of insurance providers that sellers can access if they choose to — as well as an updated policy requiring more merchants to obtain product liability insurance.