Is Amazon America's Biggest Consumer Fraud?

Fraud, fakes and scams are commonplace on the internet giant.

April 18, 2019, Los Angeles, CA – Amazon has been recognized as the world's most valuable company. However, examination would reveal the hyper-competitive environment is laced with scams, fakes and fraud that propelled the online giant into an invasive, manipulative superpower controlling 50% of online sales.

Amazon is the free-flowing conduit that enables Amazon and facilitates "bad actors" to flood the consumer market with an inexhaustible supply counterfeit, fraudulent, pirated and replica items. Simply, consumers are spending good money on bad products while Amazon takes a transaction fee for each item sold.

While Amazon relies on its illusory policy "Products offered for sale on Amazon must be authentic. The sale of counterfeit products is strictly prohibited," Amazon's practices illuminate an entirely different business operation;

• Amazon is direct retailer of counterfeit goods, e.g.; "ships from and sold by Amazon.com." Amazon Prime, Amazon Warehouse Deals, and the Fulfilled by Amazon ("FBA") offerings are plagued with counterfeit, fraudulent and replica items. Counterfeit and fraudulent products are even endorsed with Amazon's coveted "Amazon's Choice" designation.
• Amazon's own reports reveal 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. A first-ever Amazon investor warning offers;
  

  "Under our seller programs, we may be unable to prevent sellers from collecting payments, fraudulently or otherwise, when buyers never receive the products they ordered or when the products received are materially different from the sellers' descriptions. We also may be unable to prevent sellers in our stores or through other stores from selling unlawful, counterfeit, pirated, or stolen goods, selling goods in an unlawful or unethical manner, violating the proprietary rights of others, or otherwise violating our policies."

• The Counterfeit Report, an award-winning consumer advocate and counterfeit watchdog, found over 100,800 fake, fraudulent and replica items on Amazon and removed 58,000 fakes on behalf of infringed brand owners. Even under the supervision of two Amazon managers, some counterfeit listings, including dangerous and deadly items, remained for weeks, even months, despite hundreds of repeat infringement notices. Sellers often relist, use multiple usernames or open new accounts.
• 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."
• Many consumers would be shocked to learn that they are not 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, fraudulent and replica books, merchandise and OTC drugs. Many are shipped from China.
• Consumers might place their 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.
• Search results and product reviews are no indication of authenticity or quality, and may not even be related to the product sought. Worldwide scammers easily outsmart and trick Amazon's systems, flood the system with fake reviews and ratings, and 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 blocked or 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") 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.

And, as for Amazon's business operations;

• Amazon collects half of every U.S. retail dollar spent online, yet Amazon didn't pay any federal income taxes after topping $5.6 billion in profit in 2017 and $11.2 billion in profit in 2018.
• Amazon Corporate Counsel Annasara Purcell recently confirmed in a letter to The Counterfeit Report that Amazon will not remove counterfeit products from some of its global websites. While Amazon dodges the counterfeit removals and keeps the income stream, consumers are left vulnerable to dangerous and deadly fakes.
• 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.
• Chinese counterfeiters and dishonest sellers exploit U.S. Post Office discounts, as little as $2.50 for 1-pound First Class, for overseas mailings. The USPS loses millions delivering China goods sold on Amazon.
• 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' counterfeit 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.)

America has a complexion blemished with corporate fraud, corruption, and scams; Enron, Tyco, Madoff, Lehman Bros., Cendant, HealthSouth, WorldCom, and more. Forbes appropriately deemed the e-commerce giant a "cesspool of counterfeits and other illegal and potentially dangerous goods." Will Amazon be added to the growing list?

Amazon's offers its 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.