Tech

US-China trade deal seeks to combat sale of counterfeit goods

Key Points
  • The new trade agreement includes provisions that seek to help prevent the sale of counterfeit goods on e-commerce platforms. 
  • The countries agreed that both parties will work to combat the prevalence of counterfeit or pirated goods and take action when they fail to stop this activity.
  • It comes as Amazon has faced increased criticism over its failure to crackdown on counterfeit products.
A worker prepares packages for delivery at a Amazon warehouse.
Sean Gallup | Getty Images

The trade agreement signed Wednesday by President Donald Trump and China includes a provision to stanch the sale of counterfeit goods on e-commerce platforms like Amazon.

The U.S. and China agreed that both parties will work to "combat the prevalence of counterfeit or pirated goods" by taking "effective action" when the online platforms have failed to prevent intellectual property infringement.

China has agreed to consider revoking an e-commerce platform's operating license if there are repeated sales of counterfeit or pirated goods. The U.S., meanwhile, has agreed to study additional measures of combating the online sale of counterfeit or pirated goods.

It comes as Amazon faces increasing criticism over its failure to crack down on counterfeit goods. While the company says it has a "zero tolerance" policy for copycat products and has developed tools to help manage the problem, its marketplace of third-party sellers continues to be plagued by pirated goods. The problem has grown so severe that advocacy groups have called for some Amazon sites to be added to the U.S. government's annual "Notorious Markets" list, which names sites and companies that facilitate the sale of counterfeit goods.

The company has taken notice of the problem. Last February, Amazon began warning investors in its annual report that it may never be able to prevent sellers from listing counterfeit goods on the platform. Earlier this month, Amazon said it would ramp up counterfeit reporting to authorities, with the hope that it will help law enforcement catch more criminals.

In April, Trump signed a memorandum seeking to crack down on the sale of counterfeit goods on Amazon, eBay, Alibaba and other online marketplaces. At the time, Trump warned the companies if they failed to clean it up, "the government will."

Here's what the new trade agreement says about the sale of counterfeits on e-commerce platforms:

Article 1.14: Infringement on Major E-Commerce Platforms

1. The Parties shall combat the prevalence of counterfeit or pirated goods on e-commerce platforms by taking effective action with respect to major e-commerce platforms that fail to take necessary measures against the infringement of intellectual property rights.

2. China shall provide that e-commerce platforms may have their operating licenses revoked for repeated failures to curb the sale of counterfeit or pirated goods.

3. The United States affirms that it is studying additional means to combat the sale of counterfeit or pirated goods.

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