UPDATE: October 16, 2019: Amazon responded to AAFA's salvo Tuesday with a four-page letter to Daniel Lee, the acting assistant U.S. Trade Representative for innovation and intellectual property, detailing that the company goes "well beyond our legal obligations and invest[s] heavily in proactive efforts to prevent counterfeits from ever reaching our stores." Amazon also noted that it stands behind all products sold on the site "even when third-party sellers do not."
In the letter, emailed to Retail Dive, the e-commerce giant pointed to efforts last year that it said prevented more than a million "suspected bad actors" from listing products and blocked more than 3 billion suspicious listings, and maintained that over 99.9% of its assortment "never have received a complaint about a suspected counterfeit from a customer or rights owner."
Dive Brief:
- For the second year in a row, the American Apparel & Footwear Association recommended that the U.S. trade office flag some of Amazon's websites as "notorious markets" for their proliferation of counterfeit goods.
- The AAFA specifically called out Amazon's Canadian, United Kingdom, German, French and Indian arms. It also asked that the U.S. Trade Representative consider domestic markets, including Amazon's U.S. site, along with international marketplaces.
- AAFA said many of its members "report that the same issues they encounter on Amazon's foreign marketplace extensions also persist on Amazon.com [in the U.S.]." An Amazon spokesperson said in an emailed statement, "Amazon is committed to eliminating counterfeits from its store and is committed to working with AAFA and its members to protect their intellectual property."
Dive Insight:
As Amazon's third-party sales platform explodes and outpaces its own retail sales, scrutiny on the platform is increasing.
Brands have complained for years about the proliferation of fakes on Amazon's Marketplace, describing a kind of whack-a-mole game in trying to knock counterfeit sellers off the site. This year, Amazon for the first time pointed to counterfeits as a potential risk to its business.
As the problem has intensified, Amazon has taken additional steps to block counterfeits. Along with guaranteeing products for customers, Amazon has added a brand registry that gives brands more power to track and control products on the company's website. The company also has a transparency service, which uses unit codes to verify authenticity, and "Project Zero," which combines advanced technology with brands' product knowledge to fight counterfeits.
But AAFA said its members expressed frustration even with some of these recent efforts. The letter quoted one member who requested counterfeit takedown's through Amazon's Brand Registry "only to have the same seller relist the items using different ASIN's, multiple times."
"It has become increasingly frustrating to justify any kind of partnership on the brand protection side, with Amazon," another AAFA member said. "We received timely responses and follow up all throughout the Brand Registry set up process and immediately after. Since then, responses are slow, if we receive a response at all."
The industry group noted Amazon's efforts at "engagement" but also said that "engagement only goes so far — Amazon needs to go further, by demonstrating the commitment to the resources and leadership necessary to make their brand protection programs scalable, transparent, and most importantly, effective."
Amazon's spokesperson said that the company invested more than $400 million in 2018 in staff and tools devoted to rooting out fraud and abuse as the company tries to "drive counterfeits in our stores to zero."
Additionally, some have tied the counterfeit issue to Amazon's market behavior, such as Birkenstock USA CEO David Kahan, who has said Amazon would only work with the brand to clean up brand counterfeits if they offered their full catalog directly through Amazon's site. Similar frustrations over fakes could become an issue in ongoing antitrust probes of Amazon.
AAFA also requested last year that some of Amazon's international sites be designated as notorious markets, but USTR's April report on the topic did not include any of the e-commerce giant's sites.
