Amazon's Integrity Under Fire

Practices and procedures put consumers at risk.

February 22, 2017, Los Angeles, CA – Amazon would like consumers to believe that Amazon is a safe place to buy name-brand goods, but “actions speak louder than words.”

Counterfeit sales have been a lucrative revenue source for the e-commerce giant, as transaction fees are charged for each sale of fake goods.  Amazon’s 2-million un-vetted Marketplace account holders can ship counterfeit products, which are never inspected by Amazon, from all over the world to unsuspecting consumers. Business Wire reported Amazon's claim that Marketplace Sellers, these third-party vendors whose items are available right alongside Amazon’s own merchandise, sold more than 2-billion items worldwide.

• Amazon purports; "The sale of counterfeit products, including any products that have been illegally replicated, reproduced, or manufactured, is strictly prohibited" -- but the fact is that counterfeit and replicas can be, and are, easily listed on Amazon.
• Amazon’s claims that infringing listings are removed -- when in fact many are not, even after repeated complaints. Just this year, The Counterfeit Report received 128 notifications from Amazon that infringing listings had been removed – when in fact they had not. Melissa Kriz, Amazon's Head of Product Integrity, vowed to resolve the issue – but it was simply lip service. The problem remains, and some complaints sent to Ms. Kriz were returned “Your message was deleted without being read.” 
• If a listing was removed from Amazon’s U.S. website (Amazon.com), inexplicably, the same listing, with the exact same Amazon listing ID number, could be found on Amazon’s United Kingdom website (Amazon.co.uk).
• The Counterfeit Report conducted dozens of name-brand test purchases from Amazon Fulfillment and Amazon Marketplace sellers, but never received an authentic item. Infringement notices, authorized by the trademark holders, were sent to Amazon for 12,699 infringing items offered on Amazon in 2016.
• Despite manufacturer notifications, Amazon does not notify consumers that they may have received a dangerous or potentially deadly counterfeit product. Of course, consumers would also be entitled to a refund.
• Amazon seller profiles do not indicate punitive action by Amazon for counterfeit sales.  
• Apple recently claimed that 90% of Apple Chargers it purchased directly from Amazon were fake. Counterfeit Apple® USB Adapters have caused one death, fires, injuries and equipment damage.
• Birkenstock, a popular sandal maker, pulled the plug on Amazon sales citing an uncontrollable counterfeit problem. Smaller manufacturers’ complain that Amazon counterfeits are destroying their business.

Counterfeit products are replicas of real products, designed to take advantage of the superior value and reputation of the real product. Amazon is proving to be an ideal platform facilitate distribution of some $1.7 trillion in global counterfeit goods -- an activity that is profitable, difficult to track and widely unpunished. The benefits are drawing an avalanche of counterfeit listings from both U.S. and global sellers.

Companies that facilitate criminal activity and benefit from the proceeds of dishonest actions that impact jobs, consumer safety and public trust create a public perception of deception with impunity. However, reputation damage is only a small part of the problem: counterfeiting costs U.S. manufacturers over $250 billion, U.S. workers over 750,000 jobs, and supports criminals and terrorists, while manufacturer's brand integrity is tarnished or destroyed.

Consumers have an intangible right to honest services (18 U.S. Code § 1346). Amazon can adopt real and effective solutions in clear, truthful and professional manner to end the counterfeiting problem that it enables. Will it?