Amazon Counterfeit Sellers Hit With Multi-Million Dollar Judgment

Amazon sellers face damages for selling fake Chanel products.

July 13, 2017, Los Angeles, CA – Amazon sellers received a strong message from a federal judge – stop selling fakes and pay a multi-million dollar fine.

A California federal judge sided with Chanel in entering a default judgment against about 30 sellers of counterfeit Chanel handbags, T-shirts and cell phone covers emblazoned with the Chanel logo sold on Amazon.com.  About 30 Amazon sellers face $3 million in fines as a result of the judge's decision according to WWD.  

Chanel sought $2 million from each individual seller for the knock-offs sold, but the court settled on $100,000. This means that Chanel will earn about $3 million total from the ruling.

Global giants Amazon and eBay are 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. The e-commerce giants are no strangers to accusations and lawsuits for selling counterfeit products, and the fact is, they do.  

• While Amazon recently touted also initiating lawsuits against two Amazon counterfeit sellers, sharply contrasting activity was occurring in the background. Amazon argued and won a U.S. Appeal’s Court decision to disavow itself from any responsibility for 'offering to sell' counterfeits products.
• A California manufacturer received a default judgement against an eBay seller of counterfeits in a U.S. Federal Court case naming eBay, PayPal, and eleven eBay sellers for counterfeit sales. The lawsuit was settled and sealed last month. (Case No. 8:15-CV-01330)
• In June 2008, the French Commercial Court fined eBay $61 million in a lawsuit filed by the conglomerate LVMH Moet Hennessy - Louis Vuitton. An appeals court later lowered the award.
• In 2010, eBay and its European unit were fined again by the Commercial Court of Paris, who ruled that the company violated a 2008 court order regulating the sale of LVMH products.
• Louis Vuitton won a $23 million dollar judgment in a Florida court against 200 Chinese retailers who were selling knock off goods online in the US.
• Alexander Wang was awarded $90 million in damages after successfully suing over 45 defendants operating websites selling counterfeit goods bearing the brand’s name.

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.