Amazon faces criticism for being 'complicit' with counterfeiters

"The reputation you've built goes down the toilet," says Elevation Lab's founder.

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Elevation Lab
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Amazon pledged to tackle counterfeiting in 2017, but its lax policies are still hurting inventors and small companies, one supplier says. In a blog post, Elevation Lab founder Casey Hopkins wrote that a Chinese manufacturer ripped off its popular under-desk headphone stand, "The Anchor" and is selling it cheap on Amazon and taking all its sales. Worse, he claims that Amazon is effectively abetting such counterfeiters and could do away with it via a simple change.

According to Hopkins, the counterfeit seller "literally reverse engineered it, made steel compression molds, made the logo wrong, used fake 3M adhesive that's very thin and was die-cut smaller than the top, they used a lower durometer silicone so it flexes more, it has huge mold parting lines, and the packaging is literally photocopied then reprinted (you can tell by the lack of image contrast)."

The result, he says, is that "customers are unknowingly buying crap versions of the product, while both Amazon and the scammers are profiting, and the reputation you've built goes down the toilet." It's particularly onerous for small businesses, because new sellers pop up constantly and it can take Amazon precious days to remove them.

Customers are unknowingly buying crap versions of the product, while both Amazon and the scammers are profiting, and the reputation you've built goes down the toilet.

And yet the fix is simple, Hopkins says. To stop counterfeiting, Amazon established a registry of approved sellers in 2016, aka the "Brand Registry." All it has to do to help small inventors is add a check box for suppliers that only sell directly to Amazon and don't use wholesalers. "Anyone else would have have to get approval or high vetting to sell the product," Hopkins said. On top of that, Amazon needs to increase its Brand Registry team so it can swat away counterfeit scammers more quickly, he believes.

Amazon has been regularly criticized for being too lax on counterfeiters, a problem that has kept the fashion world well away from the site, for instance. Chanel recently won a judgement against counterfeiters, but only after it persisted following a court setback. Smaller companies, though, are ill-equipped to take on expensive lawsuits.

The feds might soon wade into the fray, however. The US Government Accountability Office recently completed an investigation and was able to purchase 47 counterfeit products from Amazon, Walmart and other companies. Senator Orrin Hatch plans to convene a Senate hearing on the issue.

Update: Amazon has replied to Engadget, and though it didn't address the specific complaints from Elevation Lab, said "we work closely with vendors, sellers and rights owners to strengthen protections for their brands on Amazon." Its full statement is below.

Our customers trust that when they make a purchase through Amazon's website—either directly from Amazon or from one of its millions of third-party sellers—they will receive authentic products manufactured by the true manufacturer of those products. We strictly prohibit the sale of counterfeit products and invest heavily – both funds and company energy – to ensure our policy against the sale of such products is followed.

We work closely with vendors, sellers and rights owners to strengthen protections for their brands on Amazon. Any rights owner can register with Amazon's Brand Registry service to manage and protect their brand and intellectual property rights on Amazon.

In addition, we encourage rights owners who have a product authenticity concern to notify us, and we investigate any such claims thoroughly. We remove suspected counterfeit items as soon as we become aware of them, and we remove bad actors from selling on Amazon. We have successfully taken legal action against a number of bad actors and will continue to pursue legal action and work with law enforcement.

In order to detect bad actors and potentially counterfeit products, we employ dedicated teams of software engineers, research scientists, program managers, and investigators to operate and continually refine our anti-counterfeiting program. When a business registers to sell products through Amazon's Marketplace, Amazon's systems scan information for signals that the business might be a bad actor, and Amazon blocks most of those bad actors during registration before they can offer any products for sale.

Amazon makes significant investments in innovative machine learning and automated systems in order to anticipate and stay ahead of bad actors. On an ongoing basis, Amazon's systems also automatically and continuously scan numerous data points related to sellers, products, brands, and offers to detect activity that indicates products offered might be counterfeit.

Customers are always protected by our A-to-Z guarantee, whether they make a purchase from Amazon or a third-party seller. If ever the product doesn't arrive or isn't as advertised, customers can contact our customer support for a full refund of their order. We take this fight against bad actors very seriously and will not rest.

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Amazon faces criticism for being 'complicit' with counterfeiters