Amazon's counterfeit problem is getting worse and expanding to more sites owned by the company, according to a major retail industry advocacy group.
The American Apparel & Footwear Association, which represents more than 1,000 brands, wrote in a letter to the U.S. Trade Representative on Monday that two more Amazon sites — its marketplaces in France and India — should be added to its annual list of "Notorious Markets," which identifies sites and companies that facilitate the sale of counterfeit goods. The trade group recommended three Amazon sites in the U.K., Germany, and Canada, to the list last year for the first time.
"Despite its role as a leader in the worldwide retail landscape, and as an important selling partner for many of our member brands, Amazon continues to present significant counterfeit challenges," the letter said. "Thus, we felt it was necessary to again ask USTR to list Amazon."
The letter reflects the growing concerns around the availability of counterfeit goods through Amazon's third-party marketplace, which has gained steam in recent years after the company opened up its marketplace to third-party sellers from around the world. Amazon has launched a number of new programs to address the issue, but its online marketplace continues to suffer from counterfeit products, putting average consumers at risk of purchasing fake, or in worst cases, unsafe products.
An Amazon spokesperson said the company is "committed to eliminating counterfeits from its store," and pointed to several programs meant to help solve the problem, including a Brand Registry that offers automated tools to help spot fakes, and a project called Project Zero that uses artificial intelligence to help brands spot counterfeits and remove them.
AAFA said in the letter that Amazon has been actively engaged in discussions with the group over the past year and has launched a number of new programs to address the issue. But it said the company needs to do more to build a cleaner marketplace.
"Engagement only goes so far — Amazon needs to go further, by demonstrating the commitment to the resources and leadership necessary to make their brand protection programs scalable, transparent, and most importantly, effective," it said.
Amazon is aware of the counterfeit issue. In February, Amazon addressed its counterfeit problem in a regulatory filing for the first time, including it under the "risk factor" of its annual report. In July, the federal appeals court ruled that Amazon can be held liable for defective goods sold on its site by third-party vendors.
Here's the full statement from Amazon's spokesperson:
Amazon is committed to eliminating counterfeits from its store and is committed to working with AAFA and its members to protect their intellectual property. Amazon strictly prohibits the sale of counterfeit products. We invest heavily in prevention and take proactive steps to drive counterfeits in our stores to zero. In 2018 alone, we invested over $400 million in personnel and tools built on machine learning and data science to protect our customers from fraud and abuse in our stores.
From the moment a third-party attempts to register a selling account, our proprietary technology begins screening and analyzing during the account set-up process, blocking suspicious bad actors before they are able to register or publish a listing. In 2018, we stopped over a million suspected bad actors from opening Amazon selling accounts before they published a single listing for sale, and we blocked more than 3 billion suspected bad listings before they were published to our stores.
We also work with and empower brands through programs like Project Zero, Transparency, and Brand Registry, which strive to ensure only authentic products are sold in our stores. We investigate every claim of potential counterfeit thoroughly and in the rare instance where a bad actor gets through, we take swift action, including removing the item, permanently banning bad actors, pursuing legal action, and working with law enforcement when appropriate.