Amazon Is Awash In Fakes, Fraud, And Scams

Research exposes a shocking pattern of corporate behavior

January 16, 2020, Los Angeles, CA – Amazon's global empire is in a crisis. Amazon is facing addition to the US Notorious Market's List - a government list reserved for the worst online markets that enable and facilitate the world's largest criminal enterprise; copyright piracy, trademark infringement, and counterfeit product sales. And for good reason; Amazon is facing investigations by EU anti-trust regulators and the U.S. Federal Trade Commission (FTC) while Nike, Ikea, and Birkenstock walked away from doing business with Amazon. The U.S. Department of Defense awarded its $10 billion cloud computing contract to Microsoft over Amazon. Did Amazon's nefarious activities influence the decision?

Amazon claims, "Products offered for sale on Amazon must be authentic. The sale of counterfeit products is strictly prohibited." That's just not true. In fact, Amazon's credibility is crumbling, its reputation dissolving, and it's flooded with counterfeits, replicas, fraud, scams, fake reviews, phony endorsements, and even allegations of employee bribes.

Amazon reports they receive an infringement notice for 1 of every 100 customer page views. 200,000 brands have signed in to fight counterfeits on Amazon -- a shocking revelation of the enormity of Amazon's counterfeit problem. Over 7,000 brands have enrolled in Amazon's Project Zero, a plan to remove infringing listings across the US, Europe, and Japan. Why?

An Amazon spokesperson upped the illusory claim in a statement to FOX Business, "over 99.9% of all Amazon page views by our customers landed on pages that did not receive a notice of potential counterfeit infringement." Even so, consumers wouldn't be so confident if commercial airlines made the same claim -- 'only 1 of every 1,000 of our flights crash.'

Let's look at a few examples;

Amazon prohibits the sale of all individual Lithium-ion (Li-ion) batteries on its website, yet Amazon is a direct seller of the fraudulent, dangerous, and potentially deadly items. The batteries are the source of fires on aircraft, injuries, explosions, and deaths. A number of families and companies have sued Amazon for selling problematic hoverboards with lithium-ion batteries that have caused an estimated $2.3 million in damage, according to a December report. While there is no 18650 Li-ion battery with a capacity over 3800mAh (milliamp hours), the easily identifiable fraudulent batteries below with wild capacity claims and a fire and explosion risk are offered or were purchased on Amazon. Over 85,900 have been listed on Amazon.

Tiny microSD® computer memory cards are used in your cell phone, camera, and laptop. Authentic microSD cards bear the common microSD® trademark which is owned by SD-3C, LLC, who licenses its use to authentic, conforming products. Memory on counterfeit cards is usually a fraction of the capacity of what is published on the card, and the fake items may install malware or fail. When that happens, you are likely to lose your data, images, and damage your equipment. None of the items shown below from Amazon are authentic. There is no such product as a 64GB microSDHC® card - an obvious fake. Over 56,000 counterfeits have been removed from Amazon, yet many infringing variations of the fake products continue to be listed.

The Composite Resources patented 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. Counterfeit and replica versions of the C-A-T tourniquet have catastrophically failed during actual life-saving emergencies. The Counterfeit Report removed 8,500 infringing items on Amazon, yet infringing, replica, and non-FDA registered knockoffs of the critical medical device continue to be listed. 66% of 172 current C-A-T style tourniquets listed on Amazon are not authentic.

Drew Technologies Mongoose® Pro programming software and interface cable is used by vehicle technicians and dealers to program vehicle computers including braking, emission, airbag deployment, safety equipment and can alter odometers. Counterfeit Mongoose products may severely damage a vehicle computer and install malware in your vehicle, or the vehicle next to you, causing a catastrophic accident. Over 3,435 counterfeits have been removed, yet 1,550 complaints have been ignored for current listings for months. None of the 17 Amazon Mongoose listings reviewed outside the U.S. offered an authentic product.

Amazon continues to escape liability and turns a blind eye to counterfeits, deceptive products, and actions of its third-party Marketplace sellers. While publicly denouncing counterfeits on its websites, sharply contrasting activity occurs in the background.

• Automotive company Daimler AG, which owns Mercedes, sued Amazon for directly selling counterfeit auto parts in October 2017. The case was settled and sealed. Williams-Sonoma sued the e-commerce giant in 2018 for selling a furniture line with products that were "strikingly similar" to Williams-Sonoma's West Elm brand. Manufacturer Maglula, Inc. sued Amazon as a direct seller of its counterfeit products in December 2019. Only then were Maglula's products removed from the websites.
• The Counterfeit Report, an award-winning consumer advocate and counterfeit watchdog, found over 205,000 fake, fraudulent, and replica items on Amazon. Even with the claimed supervision of two Amazon managers, counterfeit and fraudulent items may remain for months, including dangerous and deadly goods. Some are sold by Amazon as a direct seller.
• The Wall Street Journal detailed crushed manufacturers and the availability of more than 10,870 Amazon items that had been declared unsafe by federal agencies.
• Apple® reported that 90% of Apple products it purchased directly from Amazon were counterfeit. Birkenstock, the global footwear icon, slammed Amazon as "an accomplice" of the fraudsters. The Recording Industry Association of America (RIAA) reported that 25% of new CD's it purchased and were “Fulfilled by Amazon” in the U.S. were counterfeit. Swiss watch company Swatch (Longines, Omega and Blancpain) scrapped selling on Amazon when Amazon refused to "proactively police its site for counterfeits and unauthorized retailers."
• Amazon's counterfeit practices caught the attention of federal investigators. The U.S. Government Accountability Office ("GAO") conducted an undercover investigation of e-commerce counterfeit goods sales, reporting that about 50% of the items it purchased from e-commerce websites, including Amazon (AMZN), were counterfeit. The Federal Communications Commission ("FCC") sent a letter to Amazon's CEO, Jeff Bezos, telling him to knock off the counterfeit electronics.
• The American Apparel & Footwear Association (AAFA), which represents more than 1,000 brands, has repeatedly recommended that Amazon (AMZN) be added to the U.S. Notorious Markets List.
• Washington state’s attorney general’s office said Amazon agreed to pay $700,000 as part of a legally binding agreement after an investigation revealed dozens of products marketed toward children had excessive lead and cadmium. The products were made in China, the office said, some sold by China-based third parties. Amazon didn’t admit wrongdoing.
• Peter K. Navarro, White House assistant to the President for trade and manufacturing policy, wrote a harsh condemnation in the WSJ; "when you purchase brand-name goods through online third-party marketplaces like Alibaba, Amazon, and eBay, there's a good chance you'll end up with a counterfeit."

Amazon is not making a better marketplace that serves consumers. Amazon is no more than an arena of creative destruction, leaving consumers on their own to sort the legitimate, honest sellers from all the bad actors under an umbrella of legal immunity. They are voracious churners of counterfeit, replica, and fraudulent items, indifferent to the damage they cause to consumers, legitimate sellers, and manufacturers while fulfilling their desire to be the sole source of items for purchase. There is no incentive to clean up their websites -- they make too much money. Amazon made $11 billion in profit in 2018 and didn't pay any federal income tax, yet is investing $6 billion in Amazon's India operations.

Legislative and judicial intervention is warranted and long overdue for Amazon's indifference to the damage they cause to consumers, legitimate sellers, and manufacturers.