Consumers & Brand Owners Lose, Amazon & eBay Win In Counterfeiting Crisis

Websites profit by flooding consumers with fake China goods.

October 25, 2018 - Los Angeles, CA – Consumers would be shocked to learn they are throwing away good money for an inexhaustible supply of counterfeit goods sold on Amazon and eBay. Counterfeiting is the world's largest criminal enterprise, estimated at $1.7 trillion, and e-commerce websites including Amazon and eBay take a transaction fee for each fake item sold.

The Problem; Unknown to most consumers, Amazon and eBay allow unvetted worldwide third-party sellers to inundate their websites with counterfeit goods, including dangerous and deadly items. About 50% of Amazon's business, and 80% of eBay's business comes from these online global "Marketplace" sellers. Amazon is also direct retailer of counterfeit goods; "ships from and sold by Amazon.com" and also endorses counterfeit products with its special "Amazon's Choice" designation. The deceptive fakes appear right alongside authentic items and easily fool consumers.

The Consequence; One-third of online shoppers received an unexpected surprise last year - they unwillingly received a counterfeit product from U.S. and cross-border scam artists. An undercover investigation by the U.S. Government Accountability Office ("GAO") found that about 50% of the items it purchased from e-commerce websites, including eBay and Amazon, were counterfeit.

The Counterfeit Report, an award winning consumer advocate and industry watchdog, has removed over 108 million counterfeit items offered on e-commerce websites including Amazon, eBay, Walmart and Alibaba on behalf of infringed trademark owners. Still, the problem continues to grow as the online brand protection programs are ineffective, dysfunctional or deliberately obstructive.

Only eBay reports actual sales figures, which reflect consumers purchased over 750,000 counterfeit items from just a tiny sample of listings investigated by The Counterfeit Report.

Alarmingly, the e-commerce giants did not notify buyers they received a fake after the receiving counterfeit notifications, and have skirted secondary liability for enabling the sale of counterfeits. Amazon argued and won a U.S. Appeal's Court decision to disavow itself from any responsibility for 'offering to sell' counterfeit products.

Forbes deemed the e-commerce giants a "cesspool of counterfeits and other illegal and potentially dangerous goods."

Amazon and eBay consistently respond with illusory statements they do not allow counterfeits, fakes or replicas, but that's not true. In addition to the usual avalanche of fake sunglasses, purses, clothing and watches, consumers probably wouldn't suspect the counterfeits, fakes and replicas shown below found on the websites. Even fake police badges, counterfeit OTC drugs and eBay prescription pill presses to make replica Oxycodone, Alprazolam and Xanax are listed.

(Photo: ©The Counterfeit Report)

Row 1 - Monster® never made a Tron model headphone. Supra® never produced a "Justin Bieber" model skateboard shoe, and the Drew Technologies® Mongoose® Pro vehicle diagnostic and programming interface cable was never made in purple. Vans® does not make or license the use of the VANS® trademark on iPhone 6, 7 or 8 phone cases. Your life could literally be riding on this counterfeit vehicle suspension part. Group-A Autosports® never made the Skunk2® lower suspension control arm in the color shown. An automobile suspension part failure can cause a catastrophic accident with fatal consequences to those in, and around, the counterfeit equipped vehicle.

Row 2 - Authentic Dr. Numb is not made in the 10g size shown here. Counterfeit Dr. Numb® 5% Lidocaine Cream submitted for ingredient testing did not contain any Lidocaine as indicated, but Tetracaine, a potentially fatal drug. Composite Resources, Combat Application Tourniquet® (C-A-T®), has been supplied to the U.S. Military, police, first responders and the public worldwide for the past decade but was never produced in tan. Counterfeit versions of the C-A-T tourniquet have catastrophically failed during actual life-saving applications. eBay listings offer drug pill presses to make replica prescription drugs including Oxycodone, Alprazolam, and Xanax. The Drug Enforcement Administration ("DEA") and FBI (obviously) do not sell their badges on eBay or Amazon, but counterfeits are available to terrorists, child predators and other criminals. CREE®, a global manufacturer of lighting products, does not make flashlights, yet they are sold on Amazon and eBay.

Row 3 - The various micro SD® memory cards shown were never licensed by SD-3C, LLC, the right holder of the microSD® trademark, and never produced in any authentic product line in the format and capacities shown. Pharmaceutical giant Novartis does not make its OTC anti-fungicide medication, Lamisil®, in the liquid form shown, but it is sold on Amazon and eBay.

Everyone knows selling counterfeits is illegal, yet through huge legal loopholes, and virtually immune to prosecution, IP laws and safety standards, Amazon and eBay continue to enable and facilitate criminal activity with impunity, and profit from dishonest sales which impact consumer safety, jobs and public trust. The consequence is destroyed U.S companies and retailers, lost U.S. jobs and duped consumers. 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.

Congress can act to punish offenders and protect consumers, and consumers can shop elsewhere - will they?