Is Amazon for Real About Fighting Counterfeits This Time?
Amazon.com Inc. (NASDAQ: AMZN) has long had a problem dealing with counterfeit goods on its platform. The e-commerce empire is now redoubling its efforts to fight against this “faux.”
The firm announced early on Wednesday that it has established a new Counterfeit Crimes Unit, dedicated to bringing to justice counterfeiters that violate the law and Amazon’s policies by listing counterfeit products.
This unit will be a global, multidisciplinary team composed of former federal prosecutors, experienced investigators and data analysts, and it will join Amazon’s extensive work to drive counterfeit to zero.
For this elite task force, the first objective is to prevent a counterfeit from ever being listed. The Counterfeit Crimes Unit is more focused on investigating bad actors and holding them accountable.
Amazon’s comprehensive proactive anti-counterfeit programs have ensured that 99.9% of all Amazon products viewed by customers did not have a valid counterfeit complaint.
In 2019, Amazon invested over $500 million and had more than 8,000 employees fighting fraud, including counterfeits. While this was effective in blocking over 6 billion suspected bad listings and over 2.5 million suspected bad actors in 2019, some still slipped through the cracks.
Amazon previously initiated programs like Transparency and Project Zero to fight counterfeiters. Amazon claimed that Project Zero would scan some 5 billion item updates every day, but there were some issues. Only brands enrolled in Project Zero would get the chance to remove fakes, and there was no guarantee that customers who purchased fakes will get a refund from the marketplace seller. However, Amazon claims there is a free, simple, and easy process to signup brands for Project Zero. Also Amazon does remove other counterfeit products that are not in Project Zero.
Project Zero was a step in the right direction, and it is encouraging that Amazon is following through with its Counterfeit Crimes Unit. Still, there are questions about the little guy.
Amazon stock traded down about 1% to $2,742.92 on Wednesday, in a 52-week range of $1,626.03 to $2,796.00. The consensus price target is $2,753.24.