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Pallone Wants Answers from Amazon on Counterfeit Products

Oct 10, 2018
Press Release
New Reports Suggest Counterfeit Products May Boost Amazon’s Bottomline

Energy and Commerce Ranking Member Frank Pallone, Jr. (D-NJ) sent a second letter to Amazon CEO Jeff Bezos today seeking answers to a series of questions following concerning new reports on the company’s failure to curtail the sale of counterfeit products on its website. In the letter, Pallone expressed concern that counterfeit products pose threats to the health and safety of consumers and to the sellers of legitimate products whose reputations and profit margins suffer from Amazon’s failure to address this problem.

Pallone’s letter follows up on a letter he sent in March to the CEOs of five major e-commerce companies requesting information on the companies’ efforts to address the sale of counterfeit products on their platforms. In their response to Pallone’s earlier letter, Amazon officials described efforts to prevent the sale of counterfeit products on their platform, however, in a troubling new report, the Los Angeles Times suggests that Amazon is not doing enough to root out counterfeits and that the company’s bottom line may be boosted by counterfeit products.  The article suggests that even the savviest of consumers cannot avoid counterfeits on Amazon, and small business sellers face a daunting task if they fall victim to intellectual property infringement on the site. The article contends that not only has Amazon “avoided any serious backlash for allowing the sale of fake goods, it’s actually thrived from it.” 

Recent reports suggest that sales of counterfeit goods remain pervasive throughout Amazon.com, which jeopardize consumers and third-party sellers. At a time when consumers are increasingly purchasing their products online, small businesses often have no choice but to sell their products through large e-commerce platforms,” Pallone wrote to the e-commerce giant. “I am concerned about the prevalence of sales of counterfeit products on Amazon.com, and I am interested in what additional measures the company is taking to work with those who have notified Amazon of counterfeits on the platform.” 

As part of his inquiry, Pallone is requesting answers to a series of questions, including:

  • What additional measures is Amazon taking to work with those who have notified Amazon of counterfeits on the platform?
  • What is Amazon’s response to the assertion made in the Los Angeles Times that “counterfeits also help Amazon’s bottom line,” and that as a result, Amazon has “resisted calls to do more to police its site”?
  • Can you clarify Amazon’s policy of comingling inventory from different sellers? While this policy can lead to faster delivery if products deemed by Amazon to be identical are stored in the same bin ready to ship, the policy creates the risk that counterfeit products are mixed in with authentic products.

Pallone is requesting a briefing from Amazon to address his questions by October 30, 2018.

Pallone’s letter to Amazon is available HERE.

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