Some Amazon sites should be added to 'Notorious Markets' list because of counterfeits, apparel industry group says

Key Points
  • The American Apparel & Footwear Association made its recommendations to the U.S. Trade Representative.
  • Amazon hasn't been on the list before, but China's Alibaba was included as recently as last year.
  • Amazon says it has "zero tolerance" for counterfeits.
An employee pulls a cart stacked with boxes at the fulfillment center in Kenosha, Wisconsin.
Jim Young | Bloomberg | Getty Images

Amazon's counterfeit problem has caught the attention of a major retail industry advocacy group.

The American Apparel & Footwear Association, which represents more than 1,000 brands, recommended on Monday that certain Amazon sites be added to the U.S. government's annual "Notorious Markets" list, which identifies commerce sites and companies that facilitate the sale of counterfeit goods.

"Amazon has been a leader of, and has made valuable contributions to, the future of retail," AAFA said in a statement. "We believe Amazon can, and should, be a leader in the fight against counterfeits."

The Notorious Markets list is put out every year by the U.S. Trade Representative, highlighting physical and online retailers that enable copyright piracy, trademark infringement and counterfeiting. Amazon has never been on the list, but AAFA is now advocating that the company's properties in the U.K., Canada and Germany be added this year.

It's a troubling sign for Amazon, which has been overrun by counterfeiters in recent years after the company opened up its marketplace to sellers from across the globe, most notably China. While Amazon has publicly stated that it has a "zero tolerance" policy when it comes to counterfeit sales and has developed technology to try to identify problem sellers and storefronts, the site continues to suffer from growing sales of knockoffs in categories like apparel, kitchenware and skin and beauty products.

AAFA's recommendation could also provide more fodder for President Donald Trump in his quest to punish Amazon for what he says are unfair tax policies and CEO Jeff Bezos' ownership of The Washington Post. Trump has yet to go after Amazon for facilitating counterfeit sales or giving favorable treatment to Chinese merchants.

In response to the AAFA's call, Amazon said in a statement that it is "committed to protecting American intellectual property."

"We invest tremendous resources to protect our marketplace from inauthentic goods and will continue to work with AAFA and its members to protect their intellectual property and our customers. Amazon takes a global approach to our anti-counterfeiting efforts and have a global team that is available 24 hours a day, 7 days a week to respond to and take action on reported violations and notices of potential infringement," the company said. "Amazon investigated and took action on 95% of all worldwide notices of potential infringement received from Brand Registry within eight hours and brands in Brand Registry are finding and reporting 99% fewer suspected infringements than before the launch of Brand Registry."

Encouraging enforcement

In its letter to USTR, the apparel group said it's been in regular dialogue with Amazon over the past year related to its concerns, and in May some of the organization's members met with Amazon's customer and brand protection team in Seattle.

The biggest issues members face include knockoff brands using their trademarks to sell products, inconsistencies in the ways that Amazon responds to infringement complaints, unauthorized use of licensed images, inadequacies of the Brand Registry program to protect brands that enroll, and the commingling of inventory in fulfillment centers, causing authentic products to get mixed up with counterfeits.

"The damage to a brand's reputation can be immeasurable," the letter to USTR says. "Therefore, we encourage Amazon to improve and to actively enforce its intellectual property policies to keep counterfeit sellers off the platform."

AAFA recommended four other global websites for the list, as well as numerous physical markets in Latin America, Asia and the Middle East.

For the 2017 list, USTR highlighted Alibaba's as one of the most problematic sites because of the "prevalence of infringing listings and sales." USTR started producing the list in 2006, and began publishing it separate from its annual intellectual property report in 2011.

EU competition commissioner on Amazon antitrust concerns
EU competition commissioner on Amazon antitrust concerns