Counterfeits Flourish on Amazon, eBay and Alibaba
e-Commerce websites prove ideal for counterfeit distribution.
January 31, 2017 - Los Angeles, CA – All sorts of despicable things are involved in counterfeiting; terrorism, child labor exploitation, kidnapping, money laundering and organized crime, yet e-commerce sites reap billions in revenue and profit from transaction fees while counterfeit detection efforts, enforcement and consumer protection is severely lacking.
Counterfeit products are replicas of real products, designed to take advantage of the superior value and reputation of the real product. The products are visually deceptive and consumers are best advised to avoid trademarked items on e-commerce websites and buy directly from the manufacturer or authorized retailers.
Stemming the flow of counterfeits on these websites is often described as a whack-a-mole process as fakes are simply relisted, and the e-commerce websites don’t tell deceived consumers they purchased a fake, even when the item is dangerous or potentially deadly.
Amazon
Apple recently claimed that 90% of Apple Chargers it purchased from Amazon Direct were fake. Birkenstock, a popular sandal maker, pulled the plug on Amazon sales citing an uncontrollable counterfeit problem. Other manufacturers claim their business is being destroyed by counterfeits sold on Amazon.
Many Amazon consumers do not recognize that Amazon listings present three distinct global product outlet channels, including its 2-million Marketplace account holders who can ship counterfeit products, which are never inspected by Amazon, from all over the world.
Business Wire reported Amazon's claim that Marketplace Sellers, the third-party vendors whose items are available alongside Amazon’s own merchandise, sold more than 2 billion items worldwide.
The Counterfeit Report, a consumer advocate and watchdog, conducted dozens of name-brand test purchases from Amazon Fulfillment and Amazon Marketplace sellers, but never received an authentic item. Infringement notices were sent to Amazon for 12,699 infringing items offered on the website in 2016.
Further tarnishing Amazon's credibility are Amazon’s claims that infringing listings were removed -- when in fact they were not, and sellers allowed to relist in-arguably fake items. Amazon allows multiple sellers to list against “permanent catalog page” images (stock photos) making identification of counterfeit products difficult without test purchases.
Amazon policy claims “The sale of counterfeit products, including any products that have been illegally replicated, reproduced, or manufactured, is strictly prohibited” but Amazon is inconsistent in how they treat counterfeit complaints -- a continuous source of frustration in removing counterfeit listings. Complaints are processed through Amazon’s system in an arbitrary manner. One complaint may result in a listing being removed, yet a submission for the exact same thing again may fail -- an experience common with manufacturers and The Counterfeit Report, a manufacturer’s agent.
Deceived Amazon buyers are not told by Amazon they received a fake and may be entitled to a refund.
eBay
eBay is migrating from the auction house of garage sale items and concentrating on Marketplace sales of new items (80%) at a fixed price (86%) from un-vetted global sellers.
For example, The Counterfeit Report identified over 2.6-million counterfeit items on eBay and reported over 1,743,890 to eBay for listing removal in 2016. eBay reported over 331,300 were sold to consumers. While the sellers usually remain and may relist, the deceived eBay buyers are never told by eBay they received a fake and may be entitled to a refund.
The Counterfeit Report also purchased and received over 2,300 counterfeit products from eBay. Many were fake items -- items that never even existed in the manufacturer’s product line, but have the manufacturer’s trademark and remain listed on eBay. eBay responded by blocking The Counterfeit Report’s test purchase accounts and by extension, protections afforded eBay consumers.
eBay has publicly admitted to allegations of deleting negative feedback, blocking accounts, changing resolved dispute cases, overturning refunds and removing counterfeit comments and warnings protecting consumers from dangerous products.
eBay claims it's "just a venue" and has immunity for counterfeit sales under eBay's often cited 2008 Tiffany (NJ) Inc. v. eBay Inc.2 lawsuit. However, conscious avoidance of knowledge can be enough says the Hon. Michael Mukasey, United States Attorney General (2007-09) and U.S. District Judge (1988-2006).
Alibaba
China’s bad-boy of counterfeits appropriately named after the folk tale “Ali Baba and the Forty Thieves” continually draws scrutiny from international brands over its reputation as a haven for counterfeits. It is now likely to be the largest proliferator of counterfeit goods -- a $1.7 trillion global criminal enterprise. Alibaba’s sales account for 50 percent of all parcels shipped in China, yet a black cloud fogs Alibaba's attempts to establish itself as an internationally reputable company.
E-Commerce giants Amazon, eBay and Alibaba are no strangers to allegations of selling counterfeit goods. They face a “credibility crisis” fueled by a failure to crack down on counterfeit goods and making it easy for the world’s largest criminal enterprise to peddle $1.7 trillion in counterfeit goods to unsuspecting consumers. Social media sites Facebook®, Twitter® and Instagram® have also become popular counterfeit outlets, while Walmart® and Best Buy® were also caught offering counterfeits.
Counterfeiting supports organized crime, terrorists and criminals who avoid taxes, destroy an estimated 2.5 million jobs, and cost U.S. businesses over $250 Billion annually. Illegal counterfeiting activity is profitable, difficult to track and widely unpunished.
Buyer beware.
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