Dive Brief:

• Amazon allegedly sold counterfeit Apple products supplied by New York vendor Mobile Star, according to a lawsuit filed on Monday by Apple against Mobile Star in a U.S. district court of Northern California, Geekwire reports.

• Some 90% of the Apple products that “were directly sold by Amazon.com — not a third party seller” turned out to be counterfeit, according to the court documents. Amazon appears to be cooperating in the dispute, handing over other products produced by Mobile Star to Apple, according to Geekwire.

• The documents also allege that Mobile Star supplied fake goods to subscription marketplace Groupon.

Dive Insight:

Counterfeit merchandise has been a sticking point for e-commerce retailers including Amazon, eBay, Etsy and most prominently — Alibaba. The problem is especially acute for Amazon, which enjoys a stellar reputation for customer and trust.

“Consumers, relying on Amazon.com’s reputation, have no reason to suspect the power products they purchased from Amazon.com are anything but genuine,” Apple wrote in court documents.

Many consumers don’t realize that Amazon listings present three global product outlet channels: Amazon Direct (“Sold and Shipped by Amazon”), Amazon Fulfillment (provided to Amazon by a third-party for warehousing and shipping) and Amazon Marketplace (sold and shipped directly from third-party sellers), according to watchdog website The Counterfeit Report.

“Marketplace products are never touched by Amazon, but are shipped by sellers all over the world,” according to the site, which earlier this month released a study of dozens of name-brand test purchases from Amazon Fulfillment and Amazon Marketplace sellers. The group “never received an authentic item.” 

The Counterfeit Report noted that one counterfeit item was received from Amazon Direct, and said that as a result, “caution is still advised” even when buying from that Amazon channel.

The Mobile Star case brought by Apple shows that Amazon’s problem with counterfeit merchandise could be a wider problem. Citing concerns over counterfeiting and unauthorized selling, Birkenstock USA this summer threw in the towel for all Amazon sales. Birkenstock USA CEO David Kahan said in the letter that the only way to avoid competing with fake or stolen merchandise promoted as genuine Birkenstock products is to sell directly to Amazon, but that the company couldn’t satisfactorily guarantee that products sold anywhere on Amazon would be genuine. 

Kahan says the company is aware that shoes and sandals purporting to be “Birkenstock” will likely still be found on Amazon after the company stops selling there. "The Amazon marketplace, which operates as an 'open market,' creates an environment where we experience unacceptable business practices which we believe jeopardize our brand," he said. "Policing this activity internally and in partnership with Amazon.com has proven impossible. So, buyer beware."

Amazon hasn’t commented on the report. In a section of its website devoted to the topic of counterfeit sales, the company says, “We take product authenticity very seriously.”