Consumers Easily Deceived by Amazon and eBay Counterfeits

E-commerce sites are perfect marketplaces for fakes.

June 13, 2017 - Los Angeles, CA – Amazon and eBay are proving to be ideal platforms to enable and facilitate the distribution of some $1.7 trillion in global counterfeit goods, expected to grow to $2.8 trillion by 2022. Counterfeits are profitable for the websites, but difficult to track and widely unpunished. These benefits are drawing an avalanche of counterfeit listings from both U.S. and global sellers.

Selling counterfeits is illegal and prohibited on both websites. However, despite repeated infringement notifications, the sellers and counterfeit items often remain. Consumers are easily deceived, and manufacturers are being harmed in a big way with little recourse, The problem is that anybody, anywhere, can sell just about anything on Amazon (NASDAQ: AMZN) and eBay (NASDAQ: EBAY), including counterfeit products that may be dangerous or deadly.

• Counterfeit sales can be a lucrative revenue source for the e-commerce giants, as transaction fees are charged for each sale of fake goods.
• Alarmingly, after being notified by manufacturers, Amazon and eBay do not tell deceived buyers that they may have received a counterfeit item, even if it’s dangerous or potentially deadly, like OTC drugs, auto suspension parts or exploding Apple® USB chargers.
• A Tennessee family is suing Amazon for $30 million after a counterfeit FITURBO® FI hoverboard caught fire and completely destroyed their $1 million Nashville home in 2016, injuring two of the family’s four children. The plaintiffs contend the hoverboard is counterfeit and claim the product was sold through Amazon Fulfillment according to the lawsuit obtained by The Counterfeit Report.
• There may be no indication in eBay and Amazon seller profiles of a counterfeit sales history, despite some sellers having over 100 counterfeit listings removed by The Counterfeit Report.  eBay publicly admitted to Business Insider as true, allegations of deleting negative feedback and removing counterfeit comments and warnings.
• Weary of The Counterfeit Report's ongoing exposure of millions of eBay counterfeits, eBay blocked The Counterfeit Report's test purchase accounts and by extension, protections afforded eBay consumers.
• The U.S. Postal Service loses millions delivering counterfeits from China under reduced “terminal fee” postage agreements.

The Counterfeit Report identified over 3 million counterfeit items on eBay and reported over 1.9 million to eBay for listing removal, authorized by the trademark holders. The counterfeits included electronics, over-the-counter (OTC) drugs, sporting goods, children's toys and fragrances. All were represented to be covered under eBay's Money Back Guarantee, and while eBay reported that over 600,000 counterfeit items had already sold to eBay consumers, eBay doesn’t notify the buyers they received a fake. The Counterfeit Report also purchased and received over 2,300 products from eBay sellers. All were counterfeit.

Amazon received formal infringement notices, also authorized by the trademark holder, from The Counterfeit Report for 26,809 of 43,031 infringing items offered on Amazon in just the past year. Amazon often claimed infringing listings were removed when they were not, and was caught altering infringing content to allow the counterfeit item to remain. The Counterfeit Report also conducted dozens of name-brand test purchases from Amazon Marketplace sellers, but never received an authentic item. A recent CNBC report says it best; “In Amazon's quest to be the low-cost provider of everything on the planet, the website has morphed into the world's largest flea market — a chaotic, somewhat lawless, bazaar with unlimited inventory.”

If Amazon and eBay want to maintain any consumer trust, they need to cleanse dishonest and fraudulent sellers and close counterfeit loopholes. Web platforms that facilitate criminal activity and benefit from the proceeds of dishonest actions which impact jobs, consumer safety and public trust create a public perception of deception and impunity. However, reputation damage is only a small part of the problem: counterfeiting costs U.S. manufacturers over $250 billion, and U.S. workers over 750,000 jobs.