10/18/2021 | News release | Distributed by Public on 10/17/2021 22:22
Amazon believes we have a responsibility to protect customers, brands and our store from counterfeit products and we work hard to do that. In 2020 alone, we invested over $700 million and dedicated more than 10,000 employees to stopping fraud, counterfeit and abuse. By using a combination of advanced machine learning capabilities and expert human investigators, we have built robust proactive controls to protect our store from bad actors and bad products. We have also developed powerful and industry-leading tools for brands-including Brand Registry, Project Zero and Transparency-so they can partner with us to help ensure only authentic products are sold in our store. Because of the significant resources Amazon has invested in anti-counterfeiting technologies and in building partnerships with brands, we have been able to provide customers with a trustworthy shopping experience where less than 0.01 percent of the products sold on Amazon last year received a counterfeit complaint from a customer. While we are proud of the progress we have made, we know that counterfeiters will not stop trying to deceive consumers, and that we will need to keep investing and innovating to stay ahead of counterfeiters until we have driven counterfeits to zero.
Unfortunately, counterfeiting remains a persistent retail-industry problem around the world. The Organization for Economic Co-operation and Development (OECD) estimatesthat pirated and counterfeit products make up 2.5 percent of world trade-that's $464 billion a year, or roughly the gross domestic product of the country of Belgium. So, while the prevalence of counterfeit products on Amazon may be statistically low, this issue persists throughout the retail industry and across the globe. Counterfeiters deprive brand owners of the value of their intellectual property and compete unfairly with honest entrepreneurs. Moreover, counterfeiting is sometimes a predicate crime to far more nefarious activity, such as drug trafficking, child exploitation, and terrorism. While counterfeiting is illegal in most countries, for too long counterfeiters have not been held accountable enough for their crimes.
In 2020, we launched the Counterfeit Crimes Unit (CCU) to help hold counterfeiters accountable through the courts and through law enforcement. This global team-which is made up of former federal prosecutors, former FBI agents, experienced investigators and data analysts-pursues targets around the globe and supports law enforcement efforts to bring justice to those attempting to sell counterfeits in our store. The CCU has made good progress in its first year and has forged beneficial relationships with law enforcement, demonstrating that our anti-counterfeiting efforts are more effective when we work together. Since its launch, the CCU has:
Despite these successes, it has become increasingly clear that we have to make bold changes in how we work together across the private and public sectors to stop counterfeiters. We need to better protect our borders from counterfeit goods, shut down confirmed counterfeiters across the retail industry and increase resources for law enforcement to pursue and prosecute individuals trafficking in counterfeits. Based on what we have learned from working with law enforcement to fight counterfeiters, we recommend taking the following steps:
Last fall, Amazon's CCU provided information to U.S. Customs and Border Protection (CBP) and Homeland Security Investigations (HSI) that helped block a shipment of counterfeit goods worth millions of dollars from passing through a U.S.-based logistics provider. The information provided by Amazon, combined with the investigative work of CBP and HSI, enabled law enforcement to seize eight 18-wheeler truckloads of fake automotive grilles bearing trademarks from several car brands. Not only did this collaboration prevent the counterfeits from reaching Amazon customers, but it also stopped the counterfeit grilles from entering the supply chain and from being sold through any other retailer or store.
We have also seen the power of information sharing in reverse. In 2020, we received a tip from CBP about a shipment of earbud case covers CBP had seized bearing unauthorized Champion logos. We immediately quarantined the counterfeiter's additional inventory in our fulfillment network and terminated their accounts. CCU then worked with the rights owner, HanesBrands, to sue the 13 counterfeiters in federal court in Seattle.
Customs agencies should regularly inform fulfillment networks (like Amazon's) when the agencies identify non-compliant shipments bound for a fulfillment network, and policymakers should remove any impediments to that crucial flow of information. This would enable the fulfillment network to take action on additional counterfeits and provide greater aid to law enforcement. Similarly, Amazon supports all marketplace and logistics service providers sharing information on counterfeit activity with customs agencies to aid in their detection and seizure efforts and to strengthen law enforcement's ability to dismantle the criminal networks behind these illicit goods.
While our investments to stop counterfeiters are paying off in our store, we know they are motivated and will try to quickly sell their illegal products across many other channels, including their own websites, online marketplaces, offline channels, and more. In fact, as part of our counterfeit litigation efforts, counterfeiters have openly stated that they are increasingly focusing on retail channels other than Amazon because of our work in stopping them.
This success is why information sharing about known counterfeiters is so important-it improves visibility and allows stores to alert one another and take action across the industry. We have encouraged this data sharing to help the entire industry get better. We are excited that recently, a small number of companies (including Amazon) have begun to pilot a counterfeiter information exchange program to better understand the value of this shared data. The early results are encouraging. Among the list of confirmed counterfeiters shared with us by other stores, we found matched accounts that had also tried to sell in our store. These are counterfeiters that other industry participants could have identified and stopped sooner if we had all shared our blocked counterfeiter data with each other. The private sector needs to lead the way in creating a scalable solution for real-time information sharing on confirmed counterfeiters, and we encourage more companies to work with us in building these partnerships in the future.
Unfortunately, the latest data reported by the U.S. Department of Justice shows that only 32 counterfeiters were charged with a federal crime for trafficking in counterfeit goods in all of 2019. These figures are consistent with our own experience. In the past year, CCU has reported to law enforcement authorities in the U.S., the U.K., the EU, Canada, and China all confirmed counterfeiters that we have blocked from our store. For more than 250 counterfeiters, CCU has gone further and provided authorities with in-depth referrals and evidence. Amazon acknowledges and deeply respects the hard work of law enforcement and prosecutors in fighting counterfeits around the world. The reality, however, is that counterfeit prosecution has not been sufficiently prioritized to receive the level of resourcing and attention that is needed to stop these counterfeiters.
Governments should increase the resources they provide these authorities so they can catch and prosecute counterfeiters; these resources should include funding for training and modernizing counterfeit crimes investigations and prosecution units. This is necessary to put counterfeiters out of business and to help address other illicit activities that can be tied back to the criminal enterprise, are potentially funded by counterfeiting activities, or both.
We continue to make progress in protecting our store by reducing the rate of counterfeit complaints from customers, increasing the number of brands in Brand Registry, leveraging our industry-leading anti-counterfeiting tools for brands and increasing the number of criminal referrals and litigation cases that we pursue to partner with law enforcement and courts to bring counterfeiters to justice. Amazon will continue to invest and innovate to protect customers, brands and our store. However, it's clear that stopping these bad actors will require private and public sector participants to partner together to share parcel data and information on confirmed counterfeiters, as well as increased resources for law enforcement to pursue prosecution. We realize that this will require specific policy and governmental changes that are unique to individual countries. We have published more detailed policy recommendations for the U.S., the U.K., and the EU. We will continue to add additional countries in the future.
Consumers deserve to get the authentic products they purchased. The retail industry and government bodies must step up, work together and stop counterfeiters to protect consumers, rights owners and store operators from these criminals.