![\"Amazon\"](\"https:\/\/omnilegalgroup.com\/blog\/wp-content\/uploads\/2019\/03\/Amazon-Project-Zero-300x194.jpg\" "\\"Amazon\\"")
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Counterfeit sales at Amazon have increased so much that it stated it is much more damaging to a brand owner than to Amazon when a consumer receives a counterfeit product.<\/p>\n
In February 2019, Amazon.com filed a Form 10-K annual Report with the U.S. Securities and Exchange Commission officially acknowledging to shareholders that the company\u2019s online sales platforms risked being found liable for fraudulent or unlawful activities of sellers on those platforms. Amazon admitted they may not be able to prevent sellers trafficking counterfeit and pirated goods.<\/p>\n
Amazon\u2019s Form 10-K filing stated that the law relating to the liability of online service providers is currently unsettled.\u00a0 They stated their seller programs may render the company unable to stop sellers from collecting payments when buyers never receive products they ordered or when products buyers receive are materially different than described by sellers.\u00a0 It was noted this is the first time Amazon used the word \u201ccounterfeit\u201d in an annual report.\u00a0 Although this may be their first acknowledgement of counterfeiting activities affecting their online retailers, it is old news for both small and large brand owners, i.e., Apple, Williams-Sonoma, Elevation Lab and Daimler AG.\u00a0 Apple claimed that 90% of Apple-branded products sold on Amazon are counterfeits.\u00a0 The Counterfeit Report noted that CEO Jeff Bezos himself is complicit in the sale of counterfeit items on Amazon\u2019s e-commerce platform.<\/p>\n
Amazon\u2019s susceptibility to the counterfeit problem is affected by how the company\u2019s e-commerce services are structured.\u00a0 Amazon is structured into three different e-commerce tiers: (1) The Amazon Retailer, where buyers employed by them negotiate wholesale prices for items, which are then sold by Amazon.com LLC; (2) Fulfilled by Amazon, where the sellers are third parties.\u00a0 The goods are stored in Amazon warehouses and shipped by Amazon employees; and (3) Amazon Marketplace, which is more like eBay, where Amazon is the platform, and storage and shipping is handled solely by the seller.\u00a0 Consumer trust is developed from the idea that when you buy from Amazon, you are receiving what you believe is a genuine product.\u00a0 Recent lawsuits from Daimler and Williams-Sonoma show that it is more damaging to a brand owner than to Amazon when a counterfeit product is received.\u00a0 Many people don\u2019t even know they received a counterfeit.<\/p>\n
China is the main culprit of counterfeit goods.\u00a0 In 2017, nearly 90% of all global counterfeit products seized by U.S. customs agents came from China and Hong Kong.\u00a0 If online retailers are going to continue to make their platforms available to China-based sellers, there should be some burden on them to show that the products are legitimate.\u00a0 In addition, trademark owners dealing with counterfeits should be filing lawsuits and forcing Internet stores to pay damages for counterfeits.<\/p>\n
Unauthorized distribution is a problem for trademark owners.\u00a0 Numerous brand owners who sell luxury products have had to deal with unauthorized sales of their genuine products on Amazon. These products are only supposed to be sold through a network of authorized dealers; however, brand owners find it difficult to control downstream access due to the first sale doctrine, which allows for resale of genuine products in an unchanged state.\u00a0 If the products get out of their normal distribution channel and end up on Amazon, it can be problematic where a brand owner wants to protect pricing and provide consumers with a specialized sales force and warranties, which is not available online.\u00a0 Unauthorized sales could hurt a brand owner\u2019s reputation with consumers if Amazon\u2019s price is much lower, and it can hurt relationships with dealers who feel the price difference is unfair.\u00a0 It\u2019s a little easier to combat unauthorized sales on Amazon when it\u2019s not a manufacturer selling the products on Amazon because Amazon collects material from the seller.\u00a0 When the manufacturer provides the materials, Amazon receives a sublicense to them and makes it more difficult for brand owners from a copyright standpoint through takedown notices.\u00a0 Brand owners concerned about counterfeits or unauthorized sales could use watermarking techniques or covert markings which are difficult for counterfeiters to replicate.\u00a0 It is very important to keep records of copyrightable materials, i.e., product images or advertising materials that can be registered with the U.S. Copyright Office.\u00a0 A copyright action is much more straightforward when a second or third party has appropriated copyrighted material, but not easy to enforce without accurate records. Brand owners could file for copyright registration in the event a manufacturer or someone else embarks on unauthorized sales on Amazon.<\/p>\n
To reassure the public that expects to purchase authentic products, an Amazon spokesperson stated they strictly prohibit the sale of counterfeit products and invest heavily through funds and company energy to ensure their policy against the sale of counterfeit products is followed.\u00a0 They are available 24\/7 to act on reported violations.\u00a0 They have dedicated teams of software engineers, research scientists, program managers, and investigators to continuously operate and refine their anti-counterfeiting program.\u00a0 Over 99% of all Amazon page views by customers landed on pages that did not receive a notice of potential infringement.\u00a0 Additionally, customers are protected by their guarantee, whether purchased from Amazon or a third-party seller.\u00a0 If the product is not as advertised, customers receive a full refund of their order.<\/p>\n
There still may be reason to question Amazon\u2019s ability to effectively eliminate counterfeits. Amazon\u2019s service representatives who handle the requests to take down counterfeit items usually are not legal professionals and follow a script on handling the claims. \u00a0Noted are instances of identical takedown warnings sent to Amazon whereby one is accepted and one is denied when they were analyzed by different service team members.\u00a0 While Amazon\u2019s statistic on the 99% of customer page views seems great, considering how large Amazon is with billions of page views yearly, that percentage could include a large number of infringing items not yet sent a notice.\u00a0 Regarding Amazon\u2019s statement that customers can get a full refund on counterfeit purchases through its A-to-Z Guarantee program, in it\u2019s 10-K filing, Amazon said that it \u201creimburse[s] buyers for payments up to certain limits.\u201d\u00a0 That phrase doesn\u2019t guarantee a full refund in all cases.<\/p>\n","protected":false},"excerpt":{"rendered":"
Counterfeit sales at Amazon have increased so much that it stated it is much more damaging to a brand owner than to Amazon when a consumer receives a counterfeit product. In February 2019, Amazon.com filed a Form 10-K annual Report with the U.S. Securities and Exchange Commission officially acknowledging to shareholders that the company\u2019s online…<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"gallery","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-3369","post","type-post","status-publish","format-gallery","hentry","category-blog","post_format-post-format-gallery"],"yoast_head":"\n