Between September 1 and November 27 of this year, U.S. Customs and Border Protection (CBP) in Louisville, Kentucky, seized 164 shipments of fake goods valued at more than $95 million for authentic goods. In 2017, the most recent year for which data is available, CBP seized goods valued at more than $1.2 billion at suggested retail prices for the real thing.
Many of these fake goods eventually may become available online by way of the world’s largest e-commerce retailers. Amazon, eBay, Walmart and Alibaba, among many others, have been accused of directly selling fake goods or failing to prevent fake goods from being sold at their marketplaces by third-party merchants.
Pinduoduo and Alibaba-owned Taobao, two of the three largest e-commerce sites in China, were added to the U.S. Trade Representative’s most recent Notorious Markets List. The list identifies “prominent and illustrative examples of online and physical markets in which pirated or counterfeit products and services reportedly are available or that facilitate substantial piracy and counterfeiting.”
In April, President Trump signed an order directing then-Secretary of the Department of Homeland Security (DHS), Kirstjen Nielsen, to prepare a report on the importation and sale of counterfeit goods “online third-party marketplaces and other third party intermediaries” in the United States. One of those marketplaces and intermediaries is Amazon, and although DHS has not yet delivered the report Trump requested, the president continues to take potshots at Amazon founder Jeff Bezos (who also owns The Washington Post among his private investments).
Earlier this week, Amazon filed an official protest of the Department of Defense’s $10 billion contract award to Microsoft to develop a cloud-based system for the department. In its complaint, Amazon cited the president’s repeated public and private attacks against Amazon and Jeff Bezos.
The Wall Street Journal reported last week that some administration officials want to add Amazon to the Notorious Markets List. While the designation would be a black eye for Amazon, being Notorious carries no effective penalty. The Trade Representative’s list “does not constitute a legal finding of a violation … [and it] is not an exhaustive inventory of all notorious markets around the world.” Amazon was left off the Notorious Markets List in 2018 after a concerted effort to add the company failed.
Amazon is not the only U.S.-based firm accused of doing little or nothing to prevent the sale of fake goods from its websites. Consumer watchdog The Counterfeit Report on Wednesday issued a report identifying a number of fake products available from Walmart.com, including over-the-counter medical products, beauty products and footwear.
According to the CBP, the most frequently counterfeited items seized in 2017 were apparel/accessories (15% of seizures), watches/jewelry (13%), shoes (12%), consumer electronics (12%), consumer products (11%) and purses/wallets (10%). Fake watches/jewelry seized were valued at more than $460 million, while purses/wallets were valued at more than $234 million. Consumer electronics fakes were valued at more than $85 million, and fake apparel/accessories were valued at nearly $75 million.
Thomas Mahn, director of the port of Louisville, told the North Kentucky Tribune counterfeit goods are “often compromised [by] toxic substances such as lead, methanol, antifreeze, urine, arsenic, mercury, and cancer-causing substances.” In addition to posing significant risks to U.S. consumers, Mahn added that profits from the sale of fakes have been linked to funding organized crime, drug trafficking and terrorist organizations.
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