Amazon’s transparency on fakes is good news for brands
As reported earlier this week, Amazon has released its “2020 Brand Protection Report” detailing anti-counterfeiting efforts over the last 12 months.
The company reports having blocked a staggering 10 billion suspected counterfeit listings in 2020 before these were published. Furthermore, their verification process has reportedly prevented over 6 million attempts to create fraudulent seller accounts, which has the knock-on effect of preventing these parties from listing counterfeit products for sale (a significant increase from the 2.5 million account creation attempts blocked in 2019).
Because of Amazon’s efforts, it is reported that fewer than 0.01% of products sold were subject to a complaint from customers on the grounds that the item received was counterfeit. It is also reported that Amazon seized and destroyed over 2 million products sent to its fulfilment centres that were discovered to be counterfeit before these could be sent to a customer. An impressive set of statistics that are likely to further increase consumer trust in the online retail behemoth.
Notably, Amazon also set up its own Counterfeit Crimes Unit in 2020 that operates globally with the aim of holding counterfeiters accountable. Amazon now liaises directly with law enforcement in order to identify and target repeat offenders and they voluntarily report all confirmed counterfeiters to local law enforcement agencies in the UK, EU, US, Canada and China.
Amazon also filed joint lawsuits in collaboration with household names such as Maison Valentino and KF Beauty (the company behind WUNDERBROW) to tackle counterfeit products being sold on Amazon sites. Similarly, it was also recently reported that Gucci had filed a joint lawsuit in California with Facebook against an individual using the social media platform to sell counterfeit Gucci products in another example of retail platforms joining forces with brands to tackle online counterfeiting activities.
Encouragingly, Amazon is also working with smaller businesses to file joint actions against counterfeiters including, for example, a lawsuit against 11 individuals in Washington filed in August 2020 with JL Childress (a family-run business producing travel products for parents) and four lawsuits filed in Washington with Dutch Blitz (a family-owned card game manufacturer).
After the filing of the lawsuit with JL Childress, Amazon issued a statement confirming that: “Whether a product comes from a large brand, family business, or a new entrepreneur, [Amazon’s] priority is preventing counterfeits from entering our store and damaging [their] customers’ experience and a brand’s reputation.”
To further cement their commitment to anti-counterfeiting, Amazon used this moment to announce it is taking its “Project Zero” anti-counterfeit programme to seven additional countries, expanding a program designed to help brands fight fake products, amid heightened scrutiny of the platform.
Joint actions by retail platforms and brands have been rare to date but the lawsuits filed by Amazon last year (as well as the recent action filed by Facebook and Gucci) would seem to signify a positive development in the industry for the owners of both large and smaller brands.
As reported by WIPR earlier this week: “a new era has dawned in the war against counterfeiters”. It is clear that joint lawsuits with Amazon are not only an option for large corporations and the platform is starting to work jointly with SMEs to tackle online counterfeiting.
It remains to be seen how and if the mechanism of joint lawsuits could be implemented on a wider scale for brand owners suffering high rates of online counterfeiting and whether this would have an adverse effect on fair and free competition in the online retail marketplace by limiting consumer choice if anti-counterfeiting rules are applied too rigidly.
The expansion of anti-counterfeiting work by Amazon, particularly in collaboration with brand owners, is also set against a backdrop of several lawsuits that have been filed against Amazon themselves regarding third-party products sold on their platforms which infringe brand owners’ trademark rights. For example, the multinational beauty company Coty brought an action against Amazon in Germany for trademark infringement regarding the storage of third-party counterfeit goods which infringed Coty’s trademark rights and this case was taken to the Court of Justice of the European Union (CJEU) for a decision (which was ultimately not in Coty’s favour).
More recently, a trademark infringement case filed by Christian Louboutin has also been referred to the CJEU in relation to third-party listings for counterfeit shoes on Amazon and the stocking/delivery of these goods by the Fulfilment by Amazon programme. The judgment issued by the CJEU, in this case, will be significant given that the Court has not previously held online platforms directly liable for trademark infringement and the scope of the Coty judgment was very limited.
The CJEU’s ruling in the Louboutin case could potentially impact how brand owners choose to tackle counterfeit goods being sold online moving forward, particularly if the CJEU rules that platforms such as Amazon can be held directly liable for trademark infringement in relation to third-party counterfeit listings.
Nevertheless, the action taken in 2020 by Amazon demonstrates a clear focus and proactive approach in tackling counterfeit products both online and on the ground in its fulfilment centres, which will no doubt be welcomed by brand owners who use Amazon to sell their products.
Perhaps these endeavours will go some way to alleviate the concerns of brands that have previously taken Amazon to task for a perceived lack of proactivity in tackling counterfeits online.
Megan Rannard is trainee trademark attorney at Marks & Clerk. She can be contacted at: mrannard@marks-clerk.com
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