Amazon May Face Stock Price Drop Following Legal Issues In the United States

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The year 2021 has turned out to be full of gains and high revenues for major e-commerce companies such as eBay, Amazon, and Alibaba. Almost every e-commerce giant has reported that they have garnered high revenues and profits in the running year.

However, such platforms have started facing a lot of scrutiny from the US, Chinese, and European regulators. They have started questioning the way the major e-commerce giants are running their businesses. They are curious to know how they are interacting with their customers and what kind of services and products they have been providing their customers.

Just recently, a regulatory from the United States has taken an action against the largest e-commerce giant, Amazon. The sources reveal that the particular regulatory authority is the US Consumer Product Safety Commission.

The particular commission has criticized the kind of products Amazon has been providing its customers. They have also shared extreme concerns over the kind of products they are letting third-party retailers sell through their platform.

The regulator has questioned why Amazon is involved in selling products to customers that are hazardous. As a result of the recent concern, the Consumer Product Safety Commission has announced that it is suing Amazon. The reports suggest that the regulator has adopted the idea that it is going to put a stop to the e-commerce giant’s activities.

In the complaint, the regulatory authority has posed an allegation over Amazon for the selling of products such as detectors for carbon monoxide. According to the claimant, these detectors do not operate and fail to alarm the users/households.

Furthermore, there are pajamas for children that the plaintiff has claimed can catch fire. Additionally, the regulator has claimed that there are many hair dryers that do not work properly. They claimed that if these hair dryers are dropped in water, they can end up electrocuting people. The regulatory authority has claimed that there are more than 400,000 hairdryers facing the same problem.

This is not the first time the Consumer Product Safety Commission of the United States has taken up arms against an e-commerce platform. It is one of the recent cases that has been filed by the regulator against the e-commerce giant.

In the year 2021, almost every regulatory authority has turned very aggressive against such platforms. This is the only case that has been filed by the regulator in the running year.

So far, Amazon has made a lot of revenue and profit even through third-party retailers. In just the last year, Amazon retailers made more than $80 billion in the form of commissions.

However, the recent year has been heavy on Amazon and the latest incident is only going to make things worse for Amazon. The analysts are expecting that Amazon’s recent clash with the CPSC would eventually drag down its stock prices. So far, Amazon has also experienced a 1.59% drop in its stock price in the last 24-hours.

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