Federal Investigation Reveals Amazon, eBay & Walmart Counterfeit Marketplaces
GAO report identifies risks posed by changing e-commerce counterfeits market.
February 27, 2018, Los Angeles, CA - The U.S. Government Accountability Office ("GAO") conducted undercover purchases of commonly counterfeited consumer goods on Amazon (AMZN), eBay (EBAY), Sears (SHLD), Walmart (WMT) and NewEgg.1
The GAO reports that 20 of 47 items purchased from third-party sellers on these websites were counterfeit.2 Amazon and Walmart are also direct retailers of counterfeit products, but no purchases were made by the GAO.
The GAO report released today concludes that "counterfeit goods harm the U.S. economy and can pose a threat to consumers. Consumers are increasingly purchasing goods online and counterfeiters are producing a wider variety of goods that may be sold on e-commerce websites alongside authentic products."3 The report was delivered to Senator Orrin G. Hatch, Chairman, Committee on Finance, on January 30, 2018.
The GAO warns "Infringement of Intellectual Property Rights ("IPR") through the illegal importation and distribution of counterfeit goods harms the U.S. economy and can threaten the health and safety of U.S. consumers." Changes in the market for counterfeit goods can also pose challenges to the private sector -- for example, the challenge of distinguishing counterfeit from authentic goods listed for sale online -- and complicate the enforcement efforts.
Federal agencies4 make the following consumer recommendations;
The Counterfeit Report, a popular consumer advocate and industry watchdog, has researched and removed over 25 million counterfeits, and purchased over 2,500 counterfeits from e-commerce websites. The Counterfeit Report's research and findings can be viewed here.
Alarmingly, one-third of online shoppers received an unexpected surprise last year - they unwillingly received a counterfeit product.5 Companies that facilitate criminal activity and profit from dishonest sales which impact consumer safety, jobs and public trust create a public perception of deception with impunity.
Congress can act to protect consumers, and consumers can shop elsewhere - will they?
Footnotes:
(1) The five e-commerce websites selected by the GAO were Amazon.com, Walmart.com, Sears Marketplace, Newegg.com, and eBay.com.
(2) All 47 items we purchased were shipped from U.S. addresses, signifying that any items manufactured outside the United States were imported prior to being sent to the GAO. Rights holders confirmed that at least a portion of the supply of authentic versions of the products purchased are manufactured abroad. Additionally, according to a 2011 IPR Center report, most physical counterfeit goods are manufactured abroad. Final production of some counterfeit items, such as applying labels and packaging items, may occur after items are imported into the United States. (GAO)
(3) Report to the Chairman, Committee on Finance, U.S. Senate
Full Report: Agencies Can Improve Efforts to Address Risks Posed by Changing Counterfeits Market
GAO-18-216: Published: Jan 30, 2018. Publicly Released: Feb 27, 2018.
Summary: https://www.gao.gov/products/GAO-18-216
(4) Information from the U.S. Chamber of Commerce, the International Trade Administration, U.S. Customs and Border Protection, U.S. Immigration and Customs Enforcement, the U.S. Consumer Product Safety Commission, the National Intellectual Property Rights Coordination Center, the European Consumer Centre, and Consumer Reports.
(5) Global Online Shopping Survey 2017 – Consumer Goods
Prepared by: Clarivate Analytics for MarkMonitor® Inc. November 2017
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