Amazon Again On The US Government's Notorious Markets Blacklist

Harsh criticism targets Amazon's shocking corporate behavior.

January 21, 2021, Los Angeles, CA – Amazon remains on the US "Notorious Market List" for a second year. The US Trade Representative's Notorious Markets List is reserved for the worst online markets and offenders that enable and facilitate the world's largest criminal enterprise; counterfeit product sales, copyright piracy, and trademark infringement. Amazon also has the distinction of being the first and only US company to be added to the list.

Amazon enables and facilitates an inexhaustible supply of counterfeit, fake, and replica merchandise, mostly from China, receiving the right-holders wrath. Amazon does not sufficiently vet sellers on its platforms, and the counterfeit removal processes can be lengthy and burdensome, even for right-holders that enroll in Amazon’s brand protection programs. Some 200,000 brand-owners are fighting fakes on Amazon.

Brand-owners tell an alarming story, highlighting a safe-haven for bad-actors and high levels of counterfeit goods on Amazon platforms. But, counterfeits are OK on Amazon says Amazon Corporate Counsel Annasara Purcell. Trademarks must be registered in each jurisdiction the infringing product is sold, irrespective of the fact that the bulk of counterfeit items are shipped from or sold by China sellers. It's also OK for the counterfeits to be shipped to the US from Amazon's foreign websites, says Purcell.

The Counterfeit Report, a global award-winning consumer advocate and counterfeit watchdog, did just that. The Counterfeit Report purchased dozens of counterfeit items and filed complaints for over 200,000 infringing items on behalf of the brand-owners. Amazon ignored over 11,000 complaints and continues to sell the items.

Amazon operates an organized, invasive, and manipulative global system of fraud, deception, misrepresentation, data leaks and the advertising, sale, distribution, and delivery of counterfeit and fraudulent goods. Amazon has earned global scrutiny and investigation by the US Government Accountability Office ("GAO"), US Congress, charged by EU anti-trust regulators, and is facing an investigation by the US Federal Trade Commission ("FTC"). Amazon’s British, Italian, Spanish, French, and German domains are cited explicitly as posing a significant risk to brand-owners.

Dharmesh M. Mehta, VP of Worldwide Customer Trust and Partner Support, appeared before the United States House of Representatives Subcommittee on Consumer Protection and Commerce on March 4, 2020. Mehta is responsible for preventing fraud, counterfeits, fake reviews, and other forms of abuse from harming Amazon customers, brands, and selling partners. Mehta offered shocking confirmation of Amazon's manipulative business practices and global system of counterfeits, fraud, product commingling, deception, misrepresentation, and false advertising.

USTR Robert Lighthizer stated in a release, “Today, the greatest risk of importation of counterfeit and pirated goods, harming both US content creators and US consumers, is posed not by foreign flea markets and dark web sites but by inadequate policies and inadequate action by e-commerce companies that market and sell foreign products to American consumers.”

Indifferent to the damage they cause to consumers, legitimate sellers, and manufacturers, an Amazon spokesperson said in response to the 2020 list, “Including Amazon in this report is the continuation of a personal vendetta against Amazon, and nothing more than a desperate stunt in the final days of this administration.”

Amazon's claim is simply a brazen attempt to avoid doing the right thing; aggressive and persistent action to remove counterfeit merchandise from its websites. Amazon takes a transaction fee for each item sold, but paid no federal income tax on $11.2 billion in profit in 2018 and a 1.2% tax rate on a $13.3 billion profit in 2019. Amazon claims it invested $500 million in 2019 to fight fraud and abuse -- that's less than 4 cents for every profit dollar Amazon earns. Amazon claims that only one of every 1,000 listings viewed by consumers is a confirmed counterfeit -- a creative dodge to Amazon's prior claim that only one in 100 listings are counterfeit and a US GAO investigation finding that one in two test purchases were counterfeit.

Inclusion on the USTR’s list does not carry any direct penalties, instead it is used to encourage foreign entities and nations to crack down on piracy and counterfeiting. Amazon's addition to the Notorious Markets List is warranted and long overdue, as is US legislative and judicial intervention, and begs the question: "Is Amazon America's biggest consumer fraud?"