Amazon’s battle against counterfeit products resulted in the identification, seizure and disposal of six million items worldwide last year, double the number of 2021. The e-commerce giant invested $1.2 billion, 30% more than the previous year, to deal with a problem that is closely linked to its increased collaboration with third-party sellers (who account for 58% of all products sales). The issue led the company to create its own research unit in 2020.
In its third annual Brand Protection Report, Amazon details that its anti-fraud team is made up of 15,000 employees ranging from software developers to data scientists and researchers. Efforts to crack down on fake goods are paying off: Amazon detected 800,000 attempts to create a new account to sell counterfeit products last year, up from 2.5 million in 2021. However, the company admits that, despite the advances, counterfeit products continue to be a problem in the distribution industry worldwide and across all platforms, and that more investment is needed, both public and private.
“Our strict seller verification controls and strategy of holding violators accountable through legal action are discouraging criminals,” Dharmesh Mehta, vice president of Worldwide Selling Partner Services at Amazon, said in an email. One of the measures used to reinforce security is to hold a video chat with prospective sellers in order to verify their identity. In 2022, the company or referred for investigation over 1,300 criminals in the U.S., U.K., E.U., and China, up from 600 a year earlier, said Amazon.
The proliferation of counterfeit products for online sale not only creates distrust among buyers, but also exposes tech companies to potential legal problems arising from their share of responsibility for possible crimes committed on their websites. In a December ruling, the Court of Justice of the EU did not rule out that Amazon may be responsible for the sale of counterfeit products by third parties on its platform, and left in the hands of national courts two complaints filed against Amazon by the French brand Louboutin in Belgium and in Luxembourg for selling products identical to its famous red-soled shoes.
The tech company says it is merely an intermediary and that it is taking measures against counterfeiting. Amazon’s Counterfeit Crimes Unit (CCU), which includes former prosecutors, FBI agents, investigators and data analysts, collaborated in 2022 with companies including Cartier, World Wrestling Entertainment, FELCO (which makes high precision pruning shears), General Electric and King Technology, among others.
The absolute number of valid notices of infringement filed by brands in Brand Registry decreased by over 35% last year, said Amazon.
One of the most prominent operations against counterfeit products took place in late 2022, when Chinese police dismantled three networks in various operations in which Amazon provided information. The company reported that 24,000 counterfeit items, including luxury goods, sportswear and car accessories, were seized in Guangdong and Jiangxi provinces.
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