When Will Amazon Get Serious About Counterfeits

Amazon announces yet another 'anti-counterfeit program' as fakes, fraud, and scams run rampant.

July 8, 2020 - Los Angeles, CA – Amazon engaged in chest-pounding lately, announcing the formation of its new Counterfeit Crimes Unit that aims to keep fake goods off its website and bring those who break Amazon's rules, and the law, to justice.

In reality, Amazon is pitifully slow to respond to significant pressure from sellers, consumers, and governmental agencies that counterfeits, fakes, and replicas have become rampant on its websites, hurting buyers and crushing legitimate businesses. It is easy to understand why -- Amazon takes a transaction fee for each item sold.

Glaring inaction on infringement complaints, a dysfunctional reporting system, and sellers who often relist are illustrative of, and better describe the ineffectiveness of Amazon's failed anti-counterfeit programs, including Brand Registry, pay-to-use Transparency, and Project Zero. Additionally, Amazon won't provide seller information to brand-owners, and only would provide information to authorities when it felt it had a strong case. 

Dharmesh Mehta, Vice President of Amazon Customer Trust and Partner Support, claims that "every counterfeiter is on notice that they will be held accountable to the maximum extent possible under the law, regardless of where they attempt to sell their counterfeits or where they're located."

Mehta's statement is patently false and contradicted by Amazon General Counsel Annasara Purcell, who rejected over 5,000 counterfeit notifications from The Counterfeit Report for an inarguable counterfeit product offered worldwide. View the case study.

In simplest terms, Amazon's policy prohibits counterfeits; "Products offered for sale on Amazon must be authentic. The sale of counterfeit products is strictly prohibited." In practice and evidenced by Corporate Counsel's letter and inaction, the company acts much differently.

Amazon rejects infringement notifications, requiring that a trademark must be registered in each jurisdiction the infringing product is sold, irrespective of the fact that the bulk of counterfeit items are sold worldwide and shipped by China sellers.

Most importantly, trademark registration is not a legal requirement for trademark infringement, enforcement, or removal, but merely a brazen attempt to avoid doing the right thing, while flooding worldwide markets with counterfeit and replica products. All trademark complaints submitted by The Counterfeit Report are for registered trademark infringement.

Amazon's reprehensible behavior begs the question; Is Amazon a legitimate business or criminal enterprise, and where the legislative intervention?

• Amazon reports they receive an infringement notice for 1 of every 100 customer page views, and 200,000 brands have signed in to fight counterfeits on Amazon
• Peter K. Navarro, White House assistant to President Trump for trade and manufacturing policy, wrote a harsh condemnation in the WSJ; "when you purchase brand-name goods through online third-party marketplaces like Alibaba, Amazon, and eBay, there’s a good chance you’ll end up with a counterfeit."
• A U.S. Government Accountability Office ("GAO") undercover investigation found that about 50% of the items it purchased from e-commerce websites, including Amazon, were counterfeit.
• In April, the Trump administration added five of Amazon’s foreign websites to a blacklist of “notorious markets” that facilitate the sale of counterfeit goods.
• Sen. Josh Hawley, R-Mo., asked the Department of Justice to open a criminal antitrust investigation into Amazon.
• House Antitrust Subcommittee Chairman David Cicilline said Amazon’s associate general counsel, Nate Sutton, "may have lied to Congress” at a hearing last year about how the company uses data from its third-party sellers to come up with its private-label products.

While Amazon commands about 50% of online sales, examination reveals the hyper-competitive environment is laced with counterfeits, scams, replicas, and fraud. Amazon often responds claiming it had more than 8,000 employees working to keep fakes off the site and invested $500 million in the effort in 2019. To what end?

As previously reported over the past eight years, The Counterfeit Report, a global award-winning consumer advocate and industry watchdog, has removed over 95,800 counterfeits from Amazon websites at the request of brand-owners and notified Amazon of an additional 189,000 fraudulent and replica items, including Amazon as a direct seller. Many continue to be listed.

The value of counterfeit and pirated goods is forecast to grow to $2.8 trillion and cost 5.4 million net job losses by 2022 states a 2017 International Chamber of Commerce Report.

If Amazon were genuinely concerned about counterfeit items sold on its website, they would welcome reporting of counterfeits by any party, in any form, and then act to immediately remove those items from their websites, whenever and wherever the items are listed for sale. Yet, Amazon is no more than an arena of creative destruction, leaving consumers and brand-owners as real victims of Amazon's counterfeit, fraudulent, and replica product marketplace. Amazon, indifferent to the damage they cause, paid no federal income tax on $11.2 billion in profit in 2018, and a 1.2% tax rate on $13.3 billion profit in 2019.

There is no incentive to clean up their websites -- they make too much money.