The ACCC Launches Landmark Legal Action Against Amazon Australia

Australia's consumer watchdog has taken the online retail giant to the Federal Court in a case that highlights growing scrutiny of product safety on digital marketplaces. The Australian Competition and Consumer Commission alleges that Amazon Commercial Services Pty Ltd supplied children's Unicorn Toddler Backpacks containing button batteries without the mandatory safety warnings required under Australian law.

The backpacks, marketed for young children, featured a detachable light-up unicorn plush toy powered by button batteries. These small, coin-sized batteries can cause severe internal burns or even death if swallowed by toddlers, making clear warning labels essential on both the product and its packaging.

Details of the Alleged Breaches and Timeline

According to the ACCC, the backpacks were held in Amazon's Australian fulfilment centres from 22 June 2022 until at least 1 November 2022. During this period, the products lacked the required button battery warnings. Forty-one units were sold to Australian customers through the amazon.com.au website, while 267 remained in storage as of the end of the period.

This marks the first time the ACCC has brought a Federal Court case against an online marketplace specifically over alleged non-compliance with mandatory product safety standards. The regulator is seeking declarations, penalties, costs and other orders.

Understanding the Risks of Button Batteries

Button batteries are small, round cells commonly used in toys, remote controls and other devices. When swallowed, they can lodge in the oesophagus and generate an electrical current that burns surrounding tissue. Injuries can occur within hours, and complications may include perforation, scarring or long-term health issues. Children under five are at highest risk because they are more likely to put small objects in their mouths.

Australian mandatory safety and information standards for button batteries were introduced in 2022. These require child-resistant packaging, clear warning labels and, in some cases, design features such as secure battery compartments. The standards aim to reduce the incidence of ingestions, which have risen globally with the increased use of lithium button batteries that hold their charge longer.

Amazon's Response and Marketplace Responsibilities

Amazon stated it is considering the case and remains focused on providing safe products to Australian customers. The company noted that it maintains policies and controls to ensure listed items meet compliance requirements. Following the allegations, Amazon removed the relevant listings and contacted purchasers to provide the missing safety warnings.

The case tests how Australian Consumer Law applies when an online marketplace takes possession or control of goods through its fulfilment services. The ACCC argues that Amazon AU is subject to the same supplier obligations as traditional retailers in these circumstances.

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Stakeholder Perspectives on Online Safety

ACCC Deputy Chair Catriona Lowe emphasised the importance of trust in digital markets. She noted that many Australians now shop on online marketplaces and that the warnings exist to keep children safe. The regulator described the conduct as serious and indicated it will seek penalties reflecting that view, with maximum penalties for corporations reaching $50 million for breaches of the relevant provisions.

Consumer advocacy group Choice described the proceedings as an important test of the law. Its campaigns director highlighted that online marketplaces have sometimes avoided responsibility by positioning themselves as intermediaries, and called for stronger product safety laws to prevent unsafe items reaching consumers in the first place.

Broader Implications for Australian Consumers

The lawsuit underscores challenges in regulating fast-moving consumer goods sold through global platforms. Parents purchasing toys online may assume items meet Australian safety standards, yet gaps can exist when products originate from overseas sellers or when warning requirements are overlooked during storage and fulfilment.

Similar compliance issues have been identified in independent testing of other major online retailers. The case could set precedents for how platforms handle product safety obligations, potentially leading to improved verification processes across the sector.

Consumer Advice for Parents Buying Children's Products

Parents are encouraged to check for clear button battery warnings on any toy or device containing these cells. Look for child-resistant packaging and secure battery compartments. When shopping on any platform, verify that products carry Australian compliance markings and review seller ratings and return policies.

If a product arrives without expected warnings, contact the seller or platform immediately. Families can also report concerns directly to the ACCC. Staying informed about recall notices and safety alerts helps reduce risks in the home.

The Regulatory Landscape and Calls for Reform

Australia's product safety framework continues to evolve alongside the growth of e-commerce. The 2022 button battery standards represent one step, yet advocates argue that further measures are needed to close loopholes for online marketplaces. Strengthening obligations on platforms to proactively screen third-party listings could prevent similar incidents.

International comparisons show varying approaches, with some jurisdictions imposing stricter liability on marketplaces. Australian policymakers may examine these models as the Federal Court proceedings unfold.

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Potential Outcomes and Future Outlook

The Federal Court case is expected to clarify the responsibilities of online platforms under existing consumer law. A ruling in favour of the ACCC could result in significant financial penalties and prompt industry-wide changes in how safety compliance is managed.

Regardless of the outcome, the action signals increased regulatory focus on digital retail safety. Consumers, businesses and platforms alike will watch closely for developments that shape safer shopping experiences for Australian families.

Key Takeaways for Everyday Shoppers

Online convenience should not come at the expense of child safety. Understanding mandatory standards, verifying product details and supporting robust enforcement help protect the most vulnerable. This case serves as a timely reminder that vigilance remains essential when purchasing items for young children.