This summer, Amazon announced the launch of a new Counterfeit Crimes Unit in an attempt to crack down on the sake of pirate goods on the platform.
According to the company,
The global team, made up of former federal prosecutors, experienced investigators, and data analysts, will support the company’s substantial efforts already underway to protect its store from counterfeits.
The company says
The Counterfeit Crimes Unit will mine Amazon’s data, cull information from external resources such as payment service providers and open-source intelligence, and leverage on-the-ground assets to connect the dots between targets.
Amazon says that in 2019 it assigned more than 8,000 employees and invested more than $500 million to fight fraud. Its efforts have blocked more than 2.5 million accounts before they even offered products for sale and blocked another six billion suspect listings.
As The Verge reports, counterfeit goods are a major problem on Amazon.com:
Nike recently stopped selling direct products through Amazon, citing unlicensed and imposter sellers as a contributing factor. Even Amazon’s own products and brands aren’t immune.
The problem has gotten to the point where the Trump administration recently placed five of Amazon’s foreign websites on the White House’s annual “notorious markets” list.
ZDNet noted that lawmakers are pressuring Amazon to do more:
Last year, the Senate Finance Committee released a 245-page report on the sale of counterfeit goods online. It cited the sale of counterfeit vaping products — as well as other potentially harmful or dangerous products such as electronics with counterfeit batteries — on Amazon as well as other platforms.
In the House earlier this year, Energy and Commerce Committee Chairman Frank Pallone (D-NJ) held a hearing on the matter, remarking that “the practices and policies of the online platforms have made it increasingly difficult for even the savviest consumers to avoid fake and unsafe products.”
A bill proposed in March called the Stopping Harmful Offers on Platforms by Screening Against Fakes in E-Commerce (SHOP SAFE) Act, encourages platforms like Amazon to do more to curb counterfeit sales.
The SHOP SAFE Act would
Establish trademark liability for online marketplace platforms when a third-party sell a counterfeit product that poses a risk to consumer health or safety and that platform does not follow certain best practices.
Those best practices would include “vetting sellers to ensure their legitimacy, removing counterfeit listings, and removing sellers who repeatedly sell counterfeits.”
Online markets that don’t take steps to prevent the continued sale of pirate goods could face contributory liability under the Bill.
According to the House Committee on the Judiciary,
Products like cosmetics, baby formula, batteries, chargers, airbags, car seats, and breaks are a few of the potentially life-threatening counterfeits currently sold online. The Government Accountability Office (GAO) found that 20 of 47 items purchased from third-party sellers on popular consumer websites were counterfeit.
Amazon says:
The Counterfeit Crimes Unit enables Amazon to more effectively pursue civil litigation against suspected criminals, work with brands in joint or independent investigations, and aid law enforcement officials worldwide in criminal actions against counterfeiters.
Amazon is partnering with brands and law enforcement in order to stop counterfeiters. As ZDNet reported,
Amazon and the Italian luxury brand Valentino filed a joint lawsuit against a New York firm for allegedly selling counterfeit Valentino shoes on the Amazon marketplace.
IP infringement is a multi-faceted issue on the Amazon platform. As we discussed in this blog,
The Amazon “Utility Patent Neutral Evaluation” program allows patent owners who sell products on the Amazon platform to challenge competing sales by potential infringers.
For patent owners, working with Amazon can be a far cheaper solution than patent litigation, which costs a median $650,000 for claims under $1 million, and can cost millions of dollars in legal fees for larger cases.
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