Just in time for Amazon Prime Day — along with a host of competitors offering online shopping deals — President Trump is cracking down on counterfeit trafficking by way of e-commerce platforms, such as Amazon and eBay.
On Tuesday, Trump signed a memorandum asking the executive branch to exercise tighter control over online shopping sites in the U.S. that offer third-party selling. The proposed set of sanctions would give the Secretary of Homeland Security, through the Commissioner of U.S. Customs and Border Protection, the right to seize counterfeit goods imported to the U.S. on e-commerce platforms, while imposing fines on said e-commerce sites. Trump also recommended the government pursue legislation that would strengthen the executive branch’s authority over the matter.
“Trafficking in counterfeit goods infringes on the intellectual property rights of American companies, undermines their competitiveness and harms American workers,” the memorandum stated. “Counterfeit trafficking also poses significant health and safety threats to online consumers. E-commerce platforms serve as key contributors to counterfeit trafficking by acting as intermediaries and providing marketplaces that match up buyers and sellers.”
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The Secretary of Homeland Security and the Attorney General have 120 days to develop a legislative proposal backing the memorandum.
American Apparel & Footwear Association’s president and chief executive officer Steve Lamar expressed support for the proposed legislation, emphasizing the need for greater transparency on e-commerce sites as the popularity of online shopping continues to skyrocket during the health crisis.
“The fight against fake consumer goods is about far more than lost sales and brand reputation,” Lamar said. “Counterfeit products expose consumers to a range of potential product safety hazards. We continue to push e-commerce platforms to prioritize the sale of authentic product and to increase their vetting process for third-party sellers this holiday season and into the year ahead. We look forward to detailed proposals to further reconcile this incredibly concerning, ongoing and increasingly prevalent issue.”
In January, U.S. Customs and Border Protection launched a pilot program with marketplaces and shipping services, such as Amazon, Zulily, eBay and FedEx — all of which volunteered for the program — to disclose information on shipments, package contents, manufacturing and recipient details.
Meanwhile, some fashion companies and brands have simply stopped selling products on third-party platforms in an effort to restrict fakes. In November 2019, Nike, for example, said it would no longer sell products directly to Amazon.
In response to the memorandum, eBay said counterfeits are “not welcome” on its site and that it will continue to invest in artificial intelligence in an effort to avert fake products from being sold on the web site.
“EBay invests millions of dollars annually to fight counterfeits — which is a global issue, both online and offline — in order to help ensure a safer buying and selling experience for our customers,” the company said in a statement. “We have a long history of partnering with rights owners, industry groups and law enforcement to collaborate in the fight against counterfeit goods. We welcome working with Congress on this important issue and look forward to continuing to work collaboratively with the [Trump] Administration, Congress, law enforcement and our industry partners to combat counterfeits and bad actors.”
Amazon did not respond to requests for comments. But sources close to the company pointed out that the e-commerce giant has also invested heavily in technology to help detect counterfeit items, including more than $500 million in 2019. The company’s current anti-counterfeit features include Amazon’s “Brand Registry,” which allows brands to report suspected infringement; Amazon’s Counterfeit Crimes Unit, which works to prevent fraud and investigates reported cases; and a tracing service, which assigns a serial number to each item manufactured.