Amazon and eBay - Perfect Marketplaces for Counterfeits

Websites profit, consumers are deceived, and manufacturers are damaged.

May 24, 2017 - Los Angeles, CA – Amazon and eBay are proving to be ideal platforms to enable and facilitate the distribution of some $1.7 trillion in global counterfeit goods, expected to grow to $2.8 trillion by 2022. Counterfeiting is profitable, difficult to track and widely unpunished. These benefits are drawing an avalanche of counterfeit listings from both U.S. and global sellers.

All sorts of despicable things are involved in counterfeiting; terrorism, child labor exploitation, kidnapping, money laundering and organized crime. 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.

Selling counterfeits is illegal and prohibited on both websites. However, despite repeated infringement notifications, the sellers and items often remain, consumers are deceived, and manufacturers are being harmed in a big way with little recourse, The problem is that anybody, anywhere, can sell just about anything on Amazon and eBay, including counterfeit products that may be dangerous or deadly.

• Counterfeit sales can be a lucrative revenue source for the e-commerce giants, as transaction fees are charged for each sale of fake goods.
• 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.
• A Tennessee family is suing Amazon for $30 million after a counterfeit FITURBO® FI hoverboard caught fire and completely destroyed their $1 million Nashville home in 2016, injuring two of the family’s four children. The plaintiffs contend the hoverboard is counterfeit and claim the product was sold through Amazon Fulfillment according to the lawsuit obtained by The Counterfeit Report.
• There may be no indication in eBay and Amazon seller profiles of a counterfeit sales history, despite some sellers having over 100 counterfeit listings removed by The Counterfeit Report.  eBay publicly admitted to Business Insider as true, allegations of deleting negative feedback and removing counterfeit comments and warnings.
• Weary of The Counterfeit Report's ongoing exposure of millions of eBay counterfeits, eBay banned The Counterfeit Report's test purchase accounts and by extension, protections afforded eBay consumers.
• The U.S. Postal Service loses millions delivering counterfeits from China under reduced “terminal fee” postage agreements.

The Counterfeit Report identified over 3 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 600,000 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.

Amazon received formal infringement notices, authorized by the trademark holder, from The Counterfeit Report for 26,170 infringing items offered on Amazon in just the past year. Amazon often claimed infringing listings were removed when they were not, and was caught altering infringing content to allow the counterfeit to remain. The Counterfeit Report also conducted dozens of name-brand test purchases from Amazon Marketplace sellers, but never received an authentic item. “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.

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.