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The likes of Amazon and eBay will only take on counterfeiters if forced to do so

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At the beginning of March, the owner of a small US business accused online retail behemoth Amazon of profiting from the sale of cheap Chinese counterfeits. In a blog post on his company’s website, Elevation Lab founder Casey Hopkins, whose firm makes an under-desk mount for headphones, called out Amazon for failing to do enough to prevent inferior-quality knock-offs being listed for sale on its platform. Hopkins outlined how an anonymous manufacturer in China was able to reverse engineer his under-desk headphone mount and offer it for sale on Amazon at a reduced price, depriving his company of sales, and resulting in buyers receiving substandard products. Amazon moved against the offending seller after Hopkins’ blog post was picked up by a number of technology websites, removing its listings from its platform. The Jeff Bezos-owned firm also issued a platitude-laden statement talking up its efforts to crack down on fraudsters using its marketplace.

Whether or not the seller that faked Hopkins’ product would have been dealt with in this manner if his post had not attracted media attention is debatable, but what is clear is that sales platforms such as Amazon, eBay and Walmart simply are not doing enough to prevent counterfeit goods being listed on their websites. The week before Hopkins posted his blog, a US government report warned that an increasing number of counterfeit goods are being offered for sale on ecommerce platforms. The study, published by the Government Accountability Office (GAO), noted how the growth of ecommerce had created a new and increasing threat to intellectual property rights holders, and had made it much more difficult for consumers to determine whether or not the goods they buy are genuine.

Warning that cheap counterfeit products offered for sale on ecommerce platforms are endangering legitimate manufacturers and the wider US economy, not to mention posing a significant threat to the health and safety of consumers, the GAO recommended a review of its efforts to enhance intellectual property rights enforcement, and increased cooperation between its officials and the private sector. Commenting on the contents of the report, Beverly Baskin, CEO of the US Council of Better Business Bureaus, said: “If marketplace leaders struggle to keep out counterfeit products, and if consumers cannot rely on those leading companies to protect them from counterfeits, we have a serious problem that can undermine consumer confidence in the entire retail market.”

Bizarrely, the GAO’s recommendations omitted any mention of the enhanced role ecommerce platforms themselves could play in keeping counterfeiters off their websites. Technology giants have proved very adept at reacting quickly to any threat that might impact their bottom lines, but are typically less responsive if a problem does not directly affect them financially. In much the same way that social media companies are slow to remove illegal content from their platforms, the likes of Amazon, Walmart and eBay appear reluctant to invest serious resources into ridding their networks of counterfeit products. Not only is it not profitable for them to do so, in most cases they actually make money from the sale of fake items on their websites. Generally speaking, every time a counterfeit product is sold on an ecommerce platform, its owner takes a cut of the price. As such, it simply does not make financial sense for them to make any real effort to crack down on companies and individuals that use their properties to peddle knock-offs, a situation which has resulted in them only paying lip service to doing so. While ecommerce routinely boast about their initiatives to target fraudsters, an overwhelming amount of evidence clearly shows they are not doing enough.

Sadly, it appears the only way to persuade the owners of these online marketplaces to get serious about properly policing their websites is through the drafting of new legislation that forces them to do so. Last week, the European Commission told technology firms such as Google, Facebook and Twitter that they could face fines if they fail to take down extremist material within one hour of it being reported. If lawmakers are serious about protecting intellectual property rights holders and small businesses, it would be sensible to introduce similar punishments for ecommerce firms who allow fake goods to be offered on their platforms. If Amazon, Walmart and eBay faced a substantial fine for every counterfeit listing they allowed to stay live on their websites for 24 hours, it would be likely that some of the brilliant minds they employ would quickly be put to work on developing technology that would ensure these listings are taken down as quickly as they appear.

Large internet firms have proved time and again that they care little for members of the societies they purportedly serve, be they victims of terrorist attacks that have been inspired by material spread online, or small business owners losing money to Chinese counterfeiters who are able to sell knock-offs on ecommerce platforms with near impunity. The time has come for these companies to be held accountable for their behaviour. If they fail to take action of their own accord, they should be forced to protect members of the public and businesses from the bad actors who are currently able use their products all but freely.

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A quarter of all CDs ‘fulfilled by Amazon’ in US are counterfeit, RIAA warns

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CDs ‘fulfilled by Amazon’ in the US are counterfeit

The Recording Industry Association of America (RIAA) has claimed that 25% of all CDs “fulfilled by Amazon” in the US are counterfeit.

A recent sample purchase programme conducted by the RIAA, which represents major labels that are responsible for the creation, manufacture, distribution or sale of 85% of all legitimately recorded music produced in the US, also found that 100% of new “high-quality box sets offered for sale through eBay or AliExpress in the US were counterfeit”.

The exercise revealed that 11% of new CDs offered for sale on Amazon were fake, and 16% of new CDs sold on eBay were bogus.

Publishing the findings of its sample purchase programme, the RIAA said it had also observed the sale of fake “best of” or “greatest hits” CDs or vinyl that purport to be from major record label artists on these platforms, even when the labels in question had never released such albums.

The association said it continues to see a high number of incidents in which its members branding has been used without permission on multiple ecommerce platforms, including Amazon, eBay, Redbubble and Bonanza.

“These infringements not only undermine revenues from legitimate sources to music creators and owners, they also harm the reputation and goodwill associated with the artists, brands or logos at issue,” the RIAA said.

“This harm is exacerbated by limited and inconsistent enforcement by online third-party marketplaces and other intermediaries to address counterfeit listings and sellers of counterfeit products.”

Responding to the RIAA’s findings in a statement given to Digital Music News, Amazon said: “Our customers expect that when they make a purchase through Amazon’s store—either directly from Amazon or from one of its millions of third-party sellers—they will receive authentic products.

“Amazon strictly prohibits the sale of counterfeit products and we invest heavily in both funds and company energy to ensure our policy is followed.”

Last month, research conducted by anti-piracy and counterfeit protection firm Red Points revealed that the number of items buyers believe to be fake sold on Amazon rises by a third during the company’s annual Prime Day event.

Earlier in July, Amazon announced the expansion of its flagship anti-counterfeiting Transparency programme to France, Germany, Italy, Spain, the UK, India and Canada.

First launched in the US back in March 2017, the initiative allows companies to apply unique T-shaped QR-style codes to their products, which can be used by customers, brands, Amazon and other participants in the supply chain to authenticate items being offered for sale.

 

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Canadian police target young drivers recruited by gangs to deliver drugs

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young drivers recruited by gangs to deliver drugs

Police in the Canadian province of British Columbia have arrested three teenagers in a crackdown on street-level gang activity and drug dealing.

Officers from the Abbotsford Police Gang Crime Unit (GCU) and the Abbotsford Police Drug Enforcement Unit (DEU) last week detained two 18-year-olds and one 19-year-old on suspicion of drug offences after police searches resulted in the discovery pre-packaged deals of synthetic opioid fentanyl and crack cocaine along with CA$1,500 ($1,122) in cash and a number of mobile phones.

Detectives taking part in the operation also impounded a 2016 Jeep Wrangler that is said to have been used by the suspects to deliver the drugs they are alleged to have been selling.

Police said the arrests were carried out with the assistance of a patrol division, an emergency response team and sniffer dogs.

The operation was launched after police in the region discovered that local gang members were increasingly attempting to recruit young people who had recently learned to drive.

Sergeant Maitland Smith, of Abbotsford Police’s GCU, said in a statement: “We are currently seeing a trend in Abbotsford evolving around the recruitment of youth into gangs, and more specifically ‘new’ drivers.

“More established street-level drug dealers are aware that the police are seizing vehicles and assets upon being arrested; so they are recruiting younger drivers to chauffeur them as they conduct their drug trafficking business.

“In most cases, these young, new drivers are using vehicles registered to their parents to drive the dealers around with the promise that they will get a share of the profit at the end of the day.”

Smith went on to explain that acting as a driver for drug dealers is a serious offence that could result in arrest and prosecution, regardless of whether young car owners have handled illicit substances or not.

He also warned that any vehicle that police believe has been used to facilitate the sale of illegal drugs could be seized, even if the car is officially registered to a young person’s parents.

Abbotsford Police warned young people they could be putting themselves, their friends and their relatives at risk if they become involved in drug dealing or other forms of organised crime, noting that dozens of young adults have been shot dead across the region over recent years.

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LAX border officials seize fake luxury goods worth $3.5 million smuggled into US from Hong Kong

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LAX border officials seize fake luxury goods

Customs officers working at Los Angeles International Airport (LAX) have confiscated thousands of luxury items that would have had an estimated retail value of nearly $3.5 million had they been genuine.

US Customs and Border Protection (CBP) investigators working at the airport found the haul among air cargo that had been brought into the country from Hong Kong, which is a major source of counterfeit and pirated products globally.

The massive shipment of fake items included nearly 1,250 counterfeit Gucci belts, 678 pairs of counterfeit Nike shoes, more than 530 counterfeit Louis Vuitton handbags, 500 counterfeit Samsung adaptors, over 500 counterfeit Gucci waist pack belts, 230 counterfeit Hermes handbags, 192 counterfeit Casio Shock watches, 144 counterfeit Ferragamo belts, 100 counterfeit Versace belts, and 119 counterfeit Fendi shorts.

Carlos Martel, CBP Director of Field Operations in Los Angeles, commented: “CBP protects businesses and consumers every day through an aggressive intellectual property rights enforcement programme.

“These seizures demonstrate the high level of skill and vigilance of our officers and import specialists.”

In a statement, CBP said the sheer size of the illicit shipment indicated the huge amount of profit that can be made by importing counterfeit goods into the US, and went on to warn consumers that fake items such as these are often sold through illegitimate websites and underground retail outlets.

Donald Kusser, CBP Port Director at LAX, said: “The American public should be aware that buying a counterfeit product is a lose-lose proposition, because the money they paid often funds criminal enterprises.

“In addition, buyers get a substandard low-quality product, containing unknown chemicals and likely produced under inhumane conditions.”

In a report published back in March, the Organisation for Economic Co-operation and Development (OECD) and the EU’s Intellectual Property Office revealed that pirated and counterfeit goods had grown to account for 3.3% of all global trade, noting that the majority of the fake goods seized across the globe throughout 2016 were said to have originated from Hong Kong and mainland China.

Hong Kong has also come under fire for the role it plays in the global illicit trade in smuggled wildlife products, with a coalition of local NGOs warning in January that the region plays a wildly disproportionate role in wildlife crime thanks largely to its close proximity to mainland China.

Amanda Witfort, a professor at Hong Kong University’s Faculty of Law and one of the study’s authors, said at the time: “Wildlife crime in Hong Kong remains under-policed and under-investigated. Wildlife smuggling is not regarded as organised and serious crime, under Hong Kong law.”

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