Amazon Still Plagued by Counterfeits as Prime Day Approaches

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Amazon.com Inc. (NASDAQ: AMZN) is about to kick off its Prime Day, the largest single e-commerce event in the United States. Amazon continues to press its dominance in online retail. New research shows it takes close to half of the money spent on e-commerce in America, a position Prime Day leverages to the tune of well over $1 billion. However, the volume of sales on Prime Day will serve to highlight the blight of counterfeit products sold on Amazon and the extent to which it has not come close to a resolution of the problem.

Prime Day will stretch for 36 hours, straddling July 16 and 17, starting at 3 p.m. Eastern. The event will cover most of Amazon’s largest markets around the world, which means the vast majority of Amazon’s over 100 million Prime members can participate. The deals will include groceries from its Whole Foods division, adding a new brick-and-mortar aspect to Prime Day. Amazon will expand its already impressive reach into consumer electronics, which recently has extended to its home assistant product powered by its Alexa software. Amazon also will use the event to promote Prime itself. For $119 a year, Prime offers a set of features that range from access to its massive library of streaming media, a portion of which Amazon produces itself, to free shipping, exclusive discounts, music streaming and photo storage.

The problem of counterfeits at Amazon and other companies, such as eBay, has gotten worse over time. While watchdogs and the media have set off alarms, the most notable criticisms recently were from the Federal Communications Commission and the U.S. Government Accountability Office. A letter from FCC Commissioner Mike O’Rielly directly to Amazon CEO Jeff Bezos pointed out that fake set-top boxes continue to be sold at Amazon. Organizations like The Counterfeit Report log thousands and thousands of fake items sold on Amazon, including surgical items, lithium-ion batteries and police badges.

Amazon does have policies that cover the sale of fake items. Its Amazon Anti-Counterfeiting Policy states:

Products offered for sale on Amazon must be authentic. The sale of counterfeit products is strictly prohibited. Failure to abide by this policy may result in loss of selling privileges, funds being withheld, and destruction of inventory in our possession.

Critics say Amazon does not put enough muscle behind the policy, particularly given its financial resources. Amazon, they argue, counts too much on customer reports.

Prime Day will bring a much larger stream of customers to Amazon than it would receive in a typical day. That means counterfeiters will have an especially large opportunity to prey on shoppers.

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