US bill could force Amazon to take responsibility for counterfeits

The sale of counterfeit goods has flourished in the digital age with knock-off electronics, fashion items, cosmetics and more being listed not just on dark marketplaces but also public platforms such as Amazon, Aliexpress and eBay.

In many cases, these listings steal original product names and photos, making it appear as though the item is genuine and a bargain; it can be made doubly difficult for consumers to identify counterfeit items due to many listings on these platforms being placed by third parties.

The OECD estimates that sales of these goods account for as much as 3.3 per cent of global trade in 2016, being worth trillions of dollars a year. Research indicates that profits are often funneled to support the activities of terrorist groups; drug rings; people smugglers, and other organised crime groups. Although lawmakers have previously made efforts to crack down on the sale of counterfeit consumer goods, such as with the Stop Online Piracy Act 2011, political action has so far had a limited impact.

The Shop Safe Act, which is supported by a bipartisan group of four representatives, proposes punishing companies which fail to take steps to prevent the sale of counterfeit goods on their platforms. Previously, court rulings have found that Amazon and other e-commerce companies are not liable for counterfeits sold on their platforms by third parties.

The bill aims to establish trademark liability for retailers that sell counterfeit goods; improve standards for marketplaces as they vet third-party sellers and remove those which repeatedly sell counterfeit goods, and prevent marketplaces from profiting from counterfeit goods sold by third parties by rendering them liable for the actions of the sellers.

“Consumer lives are at risk because of dangerous counterfeit products that are flooding the online marketplace,” said Republican Representative Doug Collins. “Congress must create accountability to prevent these hazardous items from infiltrating the homes of millions of Americans.”

Democratic Representative Jerry Nadler commented: “Counterfeiters have followed consumers and it is clear more must be done to combat the rising trend in online sale of counterfeit products. Consumers should be able to trust that what they see and purchase online is what they will get, but counterfeiters continue to join platforms with ease and masquerade as reliable sellers to infect American households with dangerous and unsafe counterfeit products.”

The House Energy and Commerce Committee is due to hold a hearing this week about the online sale of counterfeit products, with witnesses from Apple, Amazon and eBay.