Should Amazon pay a penalty for counterfeits sold in its marketplace?
A bill called the Shop Safe Act of 2020 currently being considered by Congress aims to curb the perennial problem of counterfeit goods being sold through e-commerce marketplaces.
The bill, which has been introduced to the House of Representatives by a bipartisan group of legislators, would shift liability for phony sales onto the owners of the marketplace websites, according to Engadget. Were the bill to become law, online marketplace platforms would be required to vet sellers for legitimacy, remove counterfeit listings and take more proactive steps to prevent the appearance of counterfeit products on-site.
Selling counterfeit goods via e-commerce marketplace channels has become a big business in numerous verticals. A report from the New York Times late last year alleged that Amazon.com not only facilitates the sale of bootleg books through its marketplace but also through its CreateSpace self-publishing platform.
Up in the higher price range, counterfeiters, often based outside the U.S., have taken to knocking off designer apparel and footwear to sell online, just as they long have done offline. The products attract frugal shoppers who either knowingly or unknowingly end up buying knockoffs positioned as the real thing on Amazon.
The House bill is not the first recent gesture politicians have made to crackdown on the sale of counterfeit goods in the U.S. via e-commerce marketplaces.
In January, the Trump administration announced that the Department of Homeland Security (DHS) would begin levying fines and other penalties against third-party marketplaces dealing in counterfeit goods.
With more than three million sellers having joined Amazon’s third-party marketplace just since 2017, according to a Feedback Express infographic, it would seem that the e-commerce titan would be the business most significantly inconvenienced by demands for scrupulous vetting of sellers.
Amazon, in a statement given to CNBC, claimed that it prohibits counterfeits and has been actively fighting to stop bad actors.
Other big retailers like Walmart and, more recently, Target, have launched their own third-party marketplaces and may want to move cautiously as they build out their operations in light of the House Bill or any other forthcoming restrictions.
- Bipartisan bill would make e-commerce platforms liable for counterfeit goods – Endgadget
- A new bill could make e-commerce companies liable for counterfeits sold on their platforms – CNBC
- Counterfeit books vex Amazon – RetailWire
- Is Trump declaring war on counterfeits or Amazon and other e-marketplaces? – RetailWire
- Why are Millennials apparently addicted to Chinese knockoffs? – RetailWire
- Amazon Has 1,029,528 New Sellers This Year (Plus Other Stats) – Feedback Express
DISCUSSION QUESTIONS: How would Amazon and others have to retool their operations if the Shop Safe Act of 2020 becomes law? Would it change the way online marketplaces operate entirely?