Amazon Fails To Protect Consumers From Counterfeits and Fraud

The self-serving Amazon 2023 report is full of bluster and self-congratulatory claims.

April 27, 2023 - Los Angeles, CA – Amazon claims its mission is "earning and maintaining customer's trust." However, the Amazon shopping experience, brand owner complaints, and history of Amazon inaction tell an entirely different story. Amazon has published its third dubious Annual Brand Protection Report filled with illusory chest-pounding and sanctimonious claims illuminating the enormity of Amazon's counterfeit problem. 700,000 brands are fighting Amazon fakes, begging the question, how many products on Amazon are authentic?

The enormity of the problem is reflected in Amazon's claims. According to Amazon, they upped their brand protection efforts to $1.2 billion and over 15,000 employees "dedicated to protecting customers, brands, selling partners, and our store from counterfeit, fraud, and other forms of abuse." Amazon claims they "worked to go upstream from the counterfeit signals we detected to identify, seize, and appropriately dispose of over 6 million counterfeit products," up from 3 million last year. The problem is getting bigger, not smaller -- up 50%. How many fakes did they miss?

In stark contrast to Amazon's claims, well-documented Amazon practices, procedures and activities tell an entirely different story, making Amazon's latest claims wholly unreliable. Amazon is a leader in the supply and trafficking of counterfeit, fraudulent, replica, and stolen goods, accompanied by phony reviews and deceptive "Amazon's Choice" endorsements on counterfeit and fraudulent items. “Make no mistake, Amazon lets criminals make a living peddling hazardous knockoffs and stolen merchandise on its platform,” said Michael Hanson, spokesperson of the Buy Safe America Coalition - AP Analyst.

Amazon's business practices (its stock is down 44% from its high) hardly represent increased efficiency, consumer confidence, and effective business operations. Instead of concentrating on the problem, the tsunami of counterfeit, fraudulent, and replica merchandise flooding the consumer marketplace, Amazon continues to deceive consumers, ignore brand owner complaints, encourage fakes, and dodge liability for the never ending flood of China garbage infecting its marketplace.

Simply put, there is little evidence that Amazon is committed to stopping counterfeit goods. Consider the following undisputable facts:

• Several of Amazon's worldwide e-commerce sites have ended up on the U.S. government’s Notorious Markets List -- reserved for the worst online counterfeit markets and offenders. Amazon is not listed in the European Commission's Counterfeit and Piracy Watch List, but is ranked second (behind Alibaba) as the most frequently reported e-commerce site offering counterfeits.
• Amazon claims a whopping 60% reduction in the creation of "bad actor" selling accounts. How could they possibly quantify fraudulent accounts they didn't find?
• It's challenging to reconcile Amazon's claim, "We help educate more consumers than ever about the harm and dangers of counterfeit products," as Amazon rarely notifies consumers they have received a counterfeit, dangerous, or fake item. Consumer reviews and alerts of counterfeits are routinely deleted.
• The Counterfeit Report, a global award-winning consumer advocate and industry watchdog, identified and removed listings for over 1.5 million counterfeit items on Amazon websites. This is for just a tiny fraction of the 700,000 brands that have signed up to fight Amazon fakes -- and a glaring representation of the challenges facing consumers and brand owners. How many fakes remain?

The Amazon Brand Registry Program is little more than a system to make trademark-owners data-entry clerks for Amazon's automated systems. It requires brand owners to register and submit individual complaints to each of Amazon's 23 worldwide websites -- an exhaustive and labor-intensive process.

• Amazon claims the number of valid notices of infringement submitted by brands in Brand Registry decreased by more than 35% from 2021. More likely, brands encountering the obstacles presented by Amazon have simply given up submissions.
• Amazon routinely rejects complaint submissions from The Counterfeit Report, insists on test purchases for products that don't exist in the trademark-owners product line, and requires repeated complaints for the same listing. In several cases, over 100 submissions were required for individual listing removals. This is hardly representative of Amazon VP Dharmesh Mehta's glowing report of a practical or proactive system for brand-owner's to work within.
• The Counterfeit Report never received a notification and refund for any of the 154 confirmed counterfeit products reported by trademark owners and purchased directly from Amazon as the direct seller, or third-party sellers.
• Even more disturbing is Amazon Senior Corporate Counsel Annasara Purcell's claim that repeat trademark-owner complaint submissions with accompanying test purchases were an "unacceptable abuse of Amazon's infringement reporting system" and directed the rejection of over 25,000 counterfeit complaints.
• Purcell went on to block the removal of trademarked counterfeit products listed on Amazon foreign websites purchased and delivered to The Counterfeit Report. It is hard to reconcile her actions with Amazon's claim, "Amazon is committed to driving counterfeits to zero," and Mehta's claim, "trust has been at the foundation of everything we do." The counterfeit items remain, but trust does not.
  

  

What exactly do Amazon's "15,000 employees dedicated to protecting consumer brands" do? Two account managers assigned The Counterfeit Report to facilitate and expedite intellectual property enforcement haven't responded in years. Calls to Amazon are routed to voice mail or recorded messages. Over 6,000 automated email responses were received, usually irrelevant to The Counterfeit Report's initial inquiry. Emails are routinely blocked or rejected as "mailbox full" or undeliverable.

In 2022, Amazon's Criminal Crimes Unit 'worked with brands big and small ... to pursue more than 1,300 criminals through litigation and criminal referrals.' How many were successfully prosecuted (at taxpayers' expense) for Amazon's failure to control the cesspool of fakes, fraud, and scams on its websites? China sellers are rarely found or prosecuted, and consumers are rarely notified they received a counterfeit, fraudulent or dangerous item. Why?

Amazon regularly engages its social media claim "all the products listed on Amazon are genuine," but it is patently false, and Amazon's commitment to removing counterfeits is illusory. Counterfeits, fakes and replicas abound, even surpassing the number of many authentic items.

For example, there is no 32GB microSDXC® memory card in the ADATA® product line. Yet, Amazon was a direct seller worldwide of the counterfeit item shown below and other items, along with third-party sellers. Amazon initially removed the counterfeit item listings in response to trademark owner complaints but relisted the item claiming, "We concluded that the claim was invalid or that the appeal was successful." The product doesn't exist in the ADATA product line, yet over 24,810 have been reported sold. Amazon collects a transaction fee for each item sold.

Amazon has no incentive to clean up its website -- they make too much money. Amazon paid no federal income tax on $11.2 billion in profit in 2018, and a 1.2% tax rate on a $13.3 billion profit in 2019. $21.33 billion in profit was reported 2020, and 2021 net income hit a first-ever high of $33.3 billion. Amazon lost $2.7 billion in 2022.

Amazon VP Dharmesh Mehta's Annual Brand Protection Report summarizes, "We are proud of the progress we have made this past year, and we will continue to invest and innovate until we drive counterfeits to zero in our store."

We found plenty of reasons to dismiss Mehta's report as self-congratulatory bunk.