The U.S. Supreme Court has rejected a closely watched case over whether Amazon can be held liable for products it allegedly “greenwashed” on its site from third-party sellers, leaving standing a Ninth Circuit decision that protected the company under Section 230 of the Communications Decency Act.
The denial leaves a key question unanswered at the national level: how far Section 230 protections reach when a platform’s algorithms recommend and monetize dubious claims about sustainability.
What the Lawsuit Claimed About Amazon’s Listings
Planet Green Cartridges, a U.S. remanufacturer of printer cartridges, accused Amazon of benefiting from third-party listings offering new, imported cartridges for sale that were falsely advertised as remanufactured or recycled. Remanufacturing is generally accepted as a more resource-efficient method of restoring used products to their original standards and alleviating the demand for raw materials.
In court filings, the plaintiff had sought $500 million in damages and alleged that Amazon’s recommendation systems effectively steered shoppers to mislabeled products, leading to as much as $3 billion of sales based on deceptive listings. The company said that this created unfair competition by dissuading consumers from legitimate remanufactured cartridges.
Section 230 and Algorithmic Recommendations
Amazon argued that Section 230 protects platforms from liability for content “provided” by third parties, including the text and assertions contained in product descriptions. The Ninth Circuit concurred, reasoning that even if Amazon’s algorithms ranked, recommended or displayed third-party statements alongside features such as reviews and sponsored placements, it could not thereby be deemed a “publisher.”
The rejection of the case by the Supreme Court, therefore, maintains that interpretation for now within Ninth Circuit states. It also avoids, for now at least, a broader reckoning about whether algorithmic curation—a key element in modern e-commerce and social media—shifts the liability calculus under Section 230.
The Court had previously passed on defining Section 230 around algorithms in similar cases involving social platforms, preferring to stay at the lower courts and spotlight traditional publisher differences. That dynamic plays out here in online retail, where marketplace operators store content but also determine what users see.
Why the Denial Matters for Online Marketplaces
Amazon’s marketplace is a colossal retail channel—roughly 60 percent of its retail sales volume comes from third-party vendors, according to company disclosures. Advertising and referral fees around those listings are a major income source, with its ads business alone pulling more than $40 billion annually by recent filings.
Consumer advocates say that when a platform’s ranking and ad products promote misleading environmental claims, the business is anything but a passive host. Sellers and sustainability groups argue that the platform’s role isn’t just editorial when algorithmic design, pay-to-play placement, and badging can significantly shape purchases.
The Ninth Circuit’s doctrine, left undisturbed after the Supreme Court denied review in this case, suggests plaintiffs will find it difficult to sue major marketplaces over third-party eco-claims unless they can show the platform actually created or significantly modified the statements. In practice, these types of cases in the future could shift to state consumer laws or product liability theories or claims that challenge individual platform-created labels and endorsements.
The Greenwashing Enforcement Landscape in the U.S.
Compliance oversight of environmentally focused marketing claims is on the rise. The Federal Trade Commission is revising its Green Guides, which are intended to offer guidance on terms like “recyclable,” “biodegradable,” and “carbon neutral.” The agency has cautioned that implied claims can be misleading if they are not supported by competent and reliable evidence.
States are also tightening standards. California, for one, restricts the use of recycling symbols on products that don’t meet certain conditions, and a number of attorneys general have taken companies to court for making factually questionable sustainability statements. Industry self-regulators like NAD have made findings that advertisers need to change or substantiate their environmental claims.
Against that backdrop, the Supreme Court’s decision turns up the heat on regulators and advertisers rather than platforms to police “green” advertising—at least until Congress revisits Section 230 to exempt algorithmic or commercial recommendation activity, which lawmakers have discussed but not enacted.
What Comes Next for Marketplaces and Regulators
For now, the Ninth Circuit’s decision stands, and Amazon dodges a high-court test of its reliance on Section 230 for marketplace content. Greenwashing plaintiffs for these big platforms may turn instead to individual sellers, challenge platform-driven badges or sustainability labels, or take issues before the FTC and state enforcement.
That lingering question—of whether a recommendation engine makes a platform more akin to an accountable participant, rather than merely a passive host—will probably come back before courts in another case, though perhaps with a cleaner factual record or a circuit split. For now, marketplaces are still generally protected from third-party environmental claims even as a commercial feature—algorithmic promotion—increasingly determines what shoppers see and buy.
