Amazon Falls Into An Abyss Of Fraud, Fakes and Scams

When big is too big.

January 8, 2019, Los Angeles, CA – Amazon has just been recognized as the world's most valuable company. Starting in 1994 as an online bookseller, Amazon inexplicably grew into the largest e-commerce company in the world. How is this possible, simply selling the same products as other worldwide retailers, while supporting the same warehouses, shipping networks and financial systems?

One only needs to look at recent headlines that disclose a hyper-competitive environment laced with scams, fraud, counterfeits and replicas that propelled the online giant into an invasive, manipulative superpower controlling 50% of online sales. The mantra of the day is clearly "beware" -- Amazon is harvesting an enormous amount of user data, and manipulating what you see and purchase, while destroying industries, brand owners, retailers, and consumers.

Amazon's marketplace is a free-flowing conduit that enables and facilitates the exact same "bad actors" to flood Amazon with scams, fraud, and an inexhaustible supply counterfeit, fake and replica products that have long polluted China's e-commerce ecosystem.

While Amazon publishes some clearly illusory core business policies, it is challenging to reconcile them Amazon's actual business practices;

• Amazon is direct retailer of counterfeit goods, e.g.; "ships from and sold by Amazon.com." and even endorses counterfeit products with its special "Amazon's Choice" designation. 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) placed orders with Amazon and found that 44 of the 194 top CD's delivered 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 Prime membership, Amazon Warehouse Deals, and the Fulfilled by Amazon ("FBA") offerings are plagued with counterfeit, fake and replica items.
• Consumers shopping Amazon may, in fact, not be buying from Amazon at all. Two thirds of Amazon's sales are from 6 million unvetted global third-party "Marketplace" sellers that are allowed to sell just about anything they want, including an inexhaustible supply of counterfeit, fake and replica books, merchandise and OTC drugs. Many are shipped from China.
• Search results and product reviews are no indication of authenticity or quality, and may not even be related to the product searched. Worldwide scammers easily outsmart and trick Amazon's systems and employees with fake reviews and ratings, while some sellers pay off workers inside Amazon to gain competitive information reports the Wall Street Journal.
• Amazon's seller evaluations (feedback) and product reviews are virtually worthless. Negative reviews are removed by Amazon, while sellers hire businesses to create dummy accounts, purchase products, and write fictitious reviews and complaints.
• The American Apparel & Footwear Association (AAFA), which represents more than 1,000 brands, has recommended that Amazon (AMZN) be added to the U.S. Notorious Markets 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.
• Amazon's shady counterfeit practices have not escaped the attention of federal investigators. The U.S. Government Accountability Office ("GAO") recently conducted an undercover investigation of e-commerce counterfeit goods sales. The GAO reported 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.
• Amazon frequently responds; "Products offered for sale on Amazon must be authentic. The sale of counterfeit products is strictly prohibited,"  yet, Amazon's own reports indicate they receive an infringement notice for 1 of every 100 customer page views, and over 100,000 brands have signed in to fight counterfeits on Amazon -- a shocking revelation of the enormity of Amazon's counterfeit problem.

And, in review of Amazon's business operations;

• Amazon collects half of every U.S. retail dollar spent online, Amazon didn't pay any federal income taxes after topping $5.6 billion in profit in 2017.
• Amazon exploits last mile delivery USPS fees and low rates unavailable to its competitors, receiving a $1.46 postal subsidy per package reports the WSJ.
• While Amazon was publicly denouncing counterfeits on its website, 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. Counterfeits, trademarks, and copyrights became the right holder's problem, and when there is an outcry over the infringements, Amazon claims it is simply a venue and immune from prosecution and liability. (Milo & Gabby, LLC. v. Amazon.com, Inc.)
• Consumers may place confidence in Amazon's guarantee; "We stand behind the products sold on our site with our A-to-z Guarantee." That could be true, but only if consumers were informed by Amazon (or knew) they received a counterfeit product. However, Amazon does not notify consumers they received a fake, even after being notified by the brand owner. Of course, consumers would then be entitled to a refund.
• Amazon has confirmed it will not remove counterfeit products from some of its global websites, leaving consumers vulnerable to dangerous and deadly fakes.
• The Counterfeit Report, an award winning consumer advocate and counterfeit watchdog, found over 75,800 counterfeit items on Amazon and removed 45,854 fakes on behalf of infringed brand owners. Even under the supervision of two Amazon managers, counterfeit listings, including dangerous and deadly items, can remain for weeks, even months, despite hundreds of repeat infringement notices. Sellers can relist, or use multiple usernames to open new accounts.
• Forbes appropriately deemed the e-commerce giant a "cesspool of counterfeits and other illegal and potentially dangerous goods."

Amazon's simply offers an all too often dismissal: "We have zero tolerance for abuse of our systems and if we find bad actors who have engaged in this behavior, we will take swift action against them, including terminating their selling accounts, deleting reviews, withholding funds, and taking legal action."

When?

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.