Amazon and eBay - Perfect Marketplaces for Counterfeits
Websites profit, consumers are deceived, and manufacturers are damaged.
March 9, 2017 - Los Angeles, CA – Amazon and eBay have become perfect platforms to enable and support distribution of counterfeit goods, a $1.7 trillion global criminal enterprise. The problem is that anybody can open a Marketplace shop and sell anything on the websites.
All sorts of despicable things are involved in counterfeiting; terrorism, child labor exploitation, kidnapping, money laundering and organized crime. Selling counterfeits is illegal and prohibited, consumers are deceived, and manufacturers are being harmed in a big way with little recourse. Yet, counterfeiting is profitable, difficult to track and widely unpunished.
Bruce Foucart, director of U.S. Homeland Security’s National Intellectual Property Rights Coordination Center stated the killers in the vicious Paris Charlie Hebdo massacre that left 12 people including two police officers dead, funded their weapons cache through the sale of counterfeit luxury goods.
Counterfeit sales can be a lucrative revenue source for the e-commerce giants, as transaction fees are charged for each sale of fake goods. The U.S. Postal Service loses millions delivering counterfeits from China under reduced “terminal fee” postage agreements.
Alarmingly, after being notified by manufacturers, Amazon and eBay do not tell deceived buyers that they may have received a counterfeit item, even if it’s dangerous or potentially deadly, like OTC drugs, auto suspension parts or exploding Apple® USB chargers.
In fact, after removing infringing listings, eBay deceptively posts to the buyer's purchase account; "If you've already sent payment, the sale should process as normal and you don't have anything to worry about."
Amazon’s 2-million unvetted Marketplace account holders, now over 40% of Amazon’s business, can ship counterfeit products, which are never inspected by Amazon, from all over the world to unsuspecting consumers. These counterfeit products appear right next to authentic items, conveying Amazon’s endorsement and an illusion they are from Amazon. Business Wire reported these Marketplace Sellers sold more than 2-billion items worldwide.
“In Amazon's quest to be the low-cost provider of everything on the planet, the website has morphed into the world's largest flea market — a chaotic, somewhat lawless, bazaar with unlimited inventory” says a recent CNBC Report.
The Counterfeit Report, a consumer advocate and watchdog, sent formal infringement notices, authorized by the trademark holders, to Amazon for 32,626 infringing items offered on Amazon in just the past year. The Counterfeit Report also conducted dozens of name-brand test purchases from Amazon Marketplace sellers, but never received an authentic item.
eBayeBay is migrating from the auction house of garage sale items and concentrating on global Marketplace sales of new items (80%) at a fixed price (86%) from unvetted global sellers. The counterfeit products are visually deceptive and may be dangerous. Consumers are best advised to avoid trademarked items and buy directly from the manufacturer or authorized retailers.
For example, The Counterfeit Report identified over 2.8 million counterfeit items on eBay and reported over 1.9 million to eBay for listing removal for just a small sample group of trademark holders. The counterfeits included electronics, over-the-counter (OTC) drugs, sporting goods, children's toys and fragrances. All were represented to be covered under eBay's Money Back Guarantee, and while eBay reported that over 560,000 counterfeit items had already sold to eBay consumers, eBay doesn’t notify the buyers. The Counterfeit Report also purchased and received over 2,300 products from eBay sellers. All were counterfeit.
If Amazon and eBay want to maintain any consumer trust, they need to cleanse dishonest and fraudulent sellers and close counterfeit loopholes. Web platforms that facilitate criminal activity and benefit from the proceeds of dishonest actions which impact jobs, consumer safety and public trust create a public perception of deception and impunity. However, reputation damage is only a small part of the problem: counterfeiting costs U.S. manufacturers over $250 billion, and U.S. workers over 750,000 jobs.
Amazon and eBay can adopt real and effective solutions in clear, truthful and professional manner to end the counterfeiting problem that they enable.
Will they, and when?