Why is the ACCC suing Amazon Australia?

The Australian Competition and Consumer Commission (ACCC) has launched Federal Court proceedings against Amazon's local unit, Amazon Commercial Services. The watchdog alleges that Amazon supplied "Unicorn Toddler Backpacks" that breached mandatory product safety labelling laws for button batteries between June and November 2022.

What specific safety hazard is at the centre of the ACCC lawsuit against Amazon?

The lawsuit involves children's backpacks that featured a detachable, light-up plush toy powered by button batteries. The ACCC states that loose button batteries pose severe, life-threatening risks to young children, including catastrophic internal burns or death if swallowed or inserted.

How many non-compliant products were sold on Amazon Australia?

According to the ACCC, Australian consumers purchased 41 of the non-compliant "Unicorn Toddler Backpacks" via amazon.com.au during the relevant 2022 period. An additional 267 units were held and subsequently seized in stock across Amazon's domestic fulfilment centres.

What legal precedent does the ACCC lawsuit against Amazon Australia?

This is the first time the ACCC has taken an online marketplace to the Federal Court for allegedly breaching mandatory product safety laws. It establishes a significant legal precedent by holding digital platforms to the same product safety standards as traditional brick-and-mortar retailers.

What is Amazon Australia's defense regarding third-party inventory?

The ACCC argues that because Amazon possessed, controlled, and distributed the stock through its local fulfilment network, it bears full supplier obligations under Australian Consumer Law.

Image for illustrative purposes only. Not a real photo.

Watchdog sues Amazon over children's backpack safety

Written by Isaac FrancisPublished May. 29 2026Last Updated May. 29 2026

The Australian Competition and Consumer Commission has launched Federal Court proceedings against Amazon Australia over alleged breaches of children's product safety laws.

The competition watchdog claims that the retail giant's local unit, Amazon Commercial Services, supplied "Unicorn Toddler Backpacks" that failed to comply with mandatory safety standards for button batteries.

According to the ACCC, between June and November 2022, the targeted backpacks—which featured a detachable, light-up plush toy—were held in Amazon’s local fulfilment centres and sold without crucial, legally required warning labels.

While 41 of these dangerous items were purchased by Australian consumers online, a further 267 units were seized in stock.

The regulator argues that because Amazon possessed and controlled the stock through its fulfilment network, the company bears the same safety obligations under Australian Consumer Law as traditional brick-and-mortar suppliers.

The legal action highlights the severe risks associated with loose button batteries, which can cause catastrophic internal burns or death if swallowed by young children.

ACCC Deputy Chair Catriona Lowe emphasised that online marketplaces are not exempt from strict safety compliance, warning that the regulator will aggressively pursue digital platforms that put young lives at risk.

Seeking formal declarations, heavy financial penalties, and court costs, this historic lawsuit marks the first time the ACCC has taken an online marketplace to the Federal Court over mandatory product safety failures, setting a massive legal precedent for global e-commerce operations down under.