Amazon Targeted For U.S. Govt. Notorious Counterfeit Markets List

Trade group recommends Amazon inclusion on counterfeit website blacklist.

October 22, 2018 - Los Angeles, CA – The U.S. Government publishes its yearly "Notorious Markets" list of the worst online markets that enable and facilitate the world's largest criminal enterprise -- copyright piracy, trademark infringement and counterfeit product sales. China's billion dollar bad boy of counterfeits, Alibaba, has the distinction of being on this list of public condemnation.

The American Apparel & Footwear Association (AAFA), which represents more than 1,000 brands, has recommended that Amazon (AMZN) be added to the Notorious Markets List.

The Counterfeit Report, an award winning consumer advocate and industry watchdog, agrees with and supports the AAFA recommendation. The Counterfeit Report found over 60,000 counterfeit items on Amazon websites and removed over 38,000 at the request of brand owners. Amazon's removal process consistently revealed that its brand protection system is ineffective and dysfunctional; brand owner complaints are ignored, sellers remain, consumers are deceived and counterfeits and fakes can remain for months and be relisted. Brand owners can expect no more than meaningless automated responses or unrelated messages while their reputations are destroyed, profits obliterated, and retailers crushed.

Amazon, awash in allegations of counterfeit product sales, scams, fake reviews, data leaks and employee bribes, continues to claim it has "zero tolerance" for counterfeits and bad actors. The statement is simply not true. Amazon's own reports state that over 100,000 brands are fighting counterfeit products on Amazon, and Amazon receives an infringement notice for 1 of every 100 customer page views. Hardly a testimonial to a safe consumer buying environment.

Many consumers are unaware that about 50% of Amazon sales are not from Amazon, but from Amazon's 2-million third-party "Marketplace" account holders. These unvetted global sellers are allowed to sell just about anything they want, including an inexhaustible supply of counterfeit merchandise. Amazon is also direct retailer of counterfeit goods; "ships from and sold by Amazon.com" and endorses counterfeit products with its special "Amazon's Choice" designation. A GAO report found that about 50% of the items it purchased from e-commerce websites, including Amazon, were counterfeit.

Shockingly little protection is afforded Amazon consumers; Amazon won't notify consumers they received a counterfeit after the brand owners notification and listing removal, and Amazon argued and won a U.S. Appeal's Court decision to disavow itself from any responsibility for 'offering to sell' counterfeit products. Certainly not a confidence building and honest business practice, but Amazon still collects a transaction fee for each fake item sold.

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. While collecting half of every U.S. retail dollar spent online, Amazon won't pay any federal income taxes after topping $5.6 billion in income in 2017.

China recently passed legislation holding e-commerce websites (Including Amazon) accountable for counterfeits beginning January 1, 2019, with fines up to $291,000 per infringement, yet the U.S. lags behind, still allowing e-commerce giants to flood the online marketplace with fakes.

Consumers have the choice to avoid businesses that enable and facilitate global criminal enterprises, and Congress can enact legislation to stop the sleazy practices. Will they?