Amazon tapped a lobbying firm run by an ally of President Donald Trump to push for government action against vendors selling counterfeit goods – an issue that has come under greater scrutiny during the U.S. trade battle with China.
From July 2018 until March 2019, Amazon has been paying Ballard Partners up to $70,000 each quarter for, in part, lobbying on issues related to "trade and tariff policy," according to three disclosure reports. However, people familiar with the matter said that the disclosure reports only tell part of the story.
Brian Ballard, a leading fundraiser in Florida for Trump during the 2016 presidential election, has been lobbying members of Trump's administration and Congress on Amazon's behalf to fight back against third party vendors who are selling fake products to their customers.
They're trying to "stop third party actors from shipping fake Nikes to the United States under the guise that they're real products," said a person familiar with their efforts. Amazon is increasingly concerned about fake and pirated products on its marketplace. In a February warning to investors, the company used the word "counterfeit" for the first time.
"This is a shot across the bow to those companies. If you don't clean it up, then the government will," Trump trade advisor Peter Navarro, who is known as a China hawk, told reporters at the time. The memorandum calls on the Departments of Homeland Security, Commerce and Justice to issue a report recommending potential regulatory measures to combat the sale and eventual shipping of these fake goods.
U.S. Customs and Border Protection constantly seizes fake products while noting that counterfeiting has become a hindrance on legitimate companies such as Amazon.
"Counterfeiters look to make profits by making fake versions of the hottest products as soon they are available on the market. Each time you buy a counterfeit good, a legitimate company loses revenue," a memo on CBP's website says.
The records show that Daniel McFaul, a former member of Trump's transition team, is one of three partners working with Ballard on Amazon's behalf.
Each of the disclosure forms lists the White House office, the office of the Vice President, the U.S. Trade Representative, Senate and House as the government entities they've contacted about the trade and tariff policies under the Trump administration.
Amazon has been a top client of Ballard's for years. In 2018, Amazon paid the firm $280,000 for lobbying services that went beyond trade issues, including business deregulation and infrastructure funding, according to data compiled by the nonpartisan Center for Responsive Politics. That year, the lobbying group had one of their best since Trump became president, finishing with an income of $18.3 million. So far in the early stages of 2019, the firm has made just over $4 million.
Ballard and a spokesperson for Amazon did not return a request for comment.
Regarding tariffs, Amazon told The Washington Post last month: "Companies of all sizes throughout the supply chain are adjusting to increased costs resulting from new tariffs. "In July last year, Reuters reported, citing a person familiar with the matter, that Amazon was looking into campaigns against tariffs.
Analysts have said that the duties on Chinese imports could impact third party sellers.
Under the headline "Amazon sellers facing higher costs," Bank of America analysts wrote in May that "3P [third party] sellers on AMZN were modestly impacted by the first round of U.S. tariffs in Sept. (raw material & finished goods costs went up)," adding that "about 25% of the products included in the U.S.'s new 25% tariffs are finished consumer goods, many likely available for purchase on Amazon through 3P sellers."