“[Amazon’s] consistent lobbying to weaken regulatory actions while failing to police against fake goods ruining the prospects of small business owners should provide plenty of reason to question the authenticity of Amazon’s efforts to take on sales of counterfeits through its e-commerce platform.”
Earlier this month, e-commerce giant Amazon.com issued its latest Brand Protection Report detailing steps taken by the tech titan to reduce the tide of counterfeit products being sold to consumers around the globe. While the report identifies several concrete steps taken by Amazon to prevent knock-offs from being listed for sale, there are plenty of questions that yet remain as to whether Amazon is genuinely committed to eliminating sales of fake branded products that the company has been known to ignore.
Brand Protection Report Shows $900M Investment Into Brand Protection Last Year
Amazon’s total investment into brand protection activities during 2021 reached more than $900 million, according to the report. Much of that money went into employing more than 12,000 brand protection professionals, including machine learning experts and investigators, leading to the seizure of more than 3 million counterfeit products that were being offered for sale over Amazon. Other highlights from the report include the prevention of 2.5 million selling accounts set up by bad actors, a significant drop from the 6 million of such accounts prevented in 2020, a 40 percent increase in the number of active brands (700,000) using Amazon’s Brand Registry, a 25 percent reduction in the number of Brand Registry members reporting valid notices of infringement, and 600 lawsuits and investigation referrals against counterfeiting operations.
Amazon’s Brand Protection Report has been received favorably by the U.S. Chamber of Commerce, which published a blog post on June 22 that was authored by the Director of External and Public Affairs in the Chamber’s Global Innovation Policy Center (GIPC), Scott Hall. As Hall’s post notes, international trade in counterfeit and pirated products has reached as much as $464 billion in annual value. The post largely reiterates the main findings of Amazon’s Brand Protection Report but it is clear that the Chamber supports the steps Amazon is taking to fight counterfeit listings on its e-commerce platform.
In recent weeks, Amazon has also made headlines for teaming up with French luxury goods designer Cartier to file a pair of lawsuits in the Western District of Washington targeting counterfeit sales of Cartier’s LOVE Bracelet on Amazon. These trademark lawsuits allege that several defendants, including a Chinese social media influencer operating under the name “Phym9y3v,” engaged in a scheme to sell counterfeit bracelets bearing Cartier’s marks while evading Amazon’s counterfeit detection tools. The lawsuits further allege that the defendant operating social media accounts under the Phym9y3v has used those accounts to distribute hidden links directing followers to the counterfeit Cartier bracelets.
Small Business Owners Call on Amazon to Take Stronger Anticounterfeiting Actions
Amazon’s brand protection efforts are impressive in terms of raw figures, and its recent lawsuits show that the e-commerce giant is willing to take on knock-off artists threatening brands that are well-known to consumers. In the past however, the Big Tech stalwart hasn’t been so quick to defend those smaller players whose IP rights are being infringed on its e-commerce platform, which has grown to become the second-largest retailer in the world in 2018 when it took in nearly $121 billion in sales. Indeed, there are many indications that Amazon has been eager to ignore counterfeit operations and earn profits from those sales to the extreme detriment of small businesses.
One such small business operation suffering from Amazon’s unwillingness to clear away counterfeiters from its platform is Elevation Labs, which in March 2018 published a blog post that went viral excoriating Amazon for its slow response to counterfeit versions of Elevation’s headphone mount. In that post, Elevation Labs’ Founder Casey Hopkins called out Amazon and its CEO Jeff Bezos for failing to take simple preventative measures to vet online sales of items that are likely not authorized by the genuine brand owner. Hopkins also called on Amazon to create heightened standards for Chinese entities trying to sell goods bearing authentic marks, noting that it would be very unusual for American brand owners to ship goods wholesale to Chinese firms with authorization to resell those items on Amazon at a lower price.
The unwillingness of Amazon and other firms to effectively police their own marketplaces was under heavy scrutiny during a Senate Judiciary Committee hearing held last November on the subject of counterfeit, stolen and unsafe goods being sold via online marketplaces. Testimony at that hearing by Aaron Muderick, Founder and President of the toy firm Crazy Aaron’s, reflected the incredible hardships that Amazon’s unwillingness to eliminate counterfeiters inflicts upon small businesses. Further, Muderick noted that the counterfeit versions of Crazy Aaron’s popular magnetic Thinking Putty product being sold are not being manufactured to meet the same federal safety requirements enforced upon the authentic goods, posing a serious public health risk to consumers.
Amazon’s Lobbying Efforts Should Raise Questions on Authenticity of Policing Efforts
Although Amazon did not have a corporate representative at the hearing, Senator Dick Durbin (D-IL) specifically called out that firm during questioning, saying that “Amazon is late to the party” when it comes to policing for counterfeits. Durbin also pointed to proposed changes by Amazon to proposed pieces of legislation like the Integrity, Notification, and Fairness in Online Retail Marketplaces for Consumers (INFORM Consumers) Act that would help the e-commerce firm avoid some of the bill’s stronger provisions.
Indeed, Amazon has been outspoken about its views against another bill currently under debate in Congress that would impact an array of business activities conducted by major online platforms. On June 1, the company’s Vice President of Public Policy, Brian Huseman, published a blog post on Amazon’s website voicing concerns over the American Innovation and Choice Online Act and the bill’s potential adverse effects on Amazon’s Prime subscription service. The post came just before news reports began indicating that bipartisan support was growing in the Senate for voting on the bill prior to the Senate’s August recess.
While there have been several competition policy analysts who have criticized the bill for handing unfettered regulatory authority to the Federal Trade Commission (FTC) to impose penalties on vaguely defined “covered platforms,” others argue that the bill’s provisions limiting self-preferencing activities on such platforms give Amazon and other large firms plenty of opportunity to mount defenses against regulatory enforcement actions. Although this bill isn’t targeted at improving Amazon’s enforcement of IP rights against counterfeiting infringers, the Big Tech firm’s consistent lobbying to weaken regulatory actions while failing to police against fake goods ruining the prospects of small business owners should provide plenty of reason to question the authenticity of Amazon’s efforts to take on sales of counterfeits through its e-commerce platform.
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