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Amazon Takes Counterfeit Sellers To Court For First Time (cnbc.com)
For the first time, Amazon is taking counterfeit sellers to court. The move comes after several sellers expressed strong concerns about their businesses getting ripped off by Amazon, which is not doing anything to curb distribution of fake, poor quality products on its ecommerce platform. Notably, even Apple had said recently that a lot of its accessories listed on Amazon are fake products. From a CNBC report: On Monday, Amazon filed suit against a group of sellers for infringing on athletic training equipment developed by TRX. In a second case, Amazon sued sellers who are offering fake versions of a patented moving product called Forearm Forklift. [...] There's no way Amazon can litigate away the problem. The company generates over $75 billion a year in commerce, and about half the volume now comes from third-party sellers. However, with Amazon showing its willingness to take abusers to court, the company can at least hope to deter counterfeit sellers with the threat of potential legal action.
Now if only they will go after the people selling fake carbon fiber airframes then all will be good.
Rather than litigation, start labeling sellers as counterfeiters right there on their amazon listing. Add a sort/filter feature to eliminate aggregating them or shuffle the listings to the bottom
"When life gives you lemons, don't make lemonade. Make life take the lemons back!" -- Cave Johnson
As the summary notes, there's no way Amazon can police the system adequately with the way it currently functions. At best, it can hope to dissuade some counterfeiters through threat of litigation.
However, to my mind, the real problem is Amazon's lack of transparency when it comes to evaluating and purchasing products from 3rd-party sellers. Amazon will just default to a lower priced listing from some random company, and unless you're paying attention, you could end up purchasing from someone else. There should be a much stronger "flag" that goes up before you can do this -- otherwise, Amazon risks getting sued for liability when people think they're purchasing stuff "from Amazon" but they get defective crap from somewhere else.
But one further issue -- what about linking product reviews (particularly for "verified purchases") to SELLER? If I'm going to be purchasing a product X from company Y rather than Amazon, I should be able to -- in some easy fashion -- just get reviews of X from Y.
I'm sure we've all seen reviews on Amazon that say, "I purchased batteries from [this company], and they're fake!" It should be transparent to find such reviews. So even if the product X has 1000 reviews with an average of 4.5 stars, if the 20 reviews from company Y say, "Beware -- this thing is a piece of junk, not as advertised!" a customer has a chance of making a more informed decision.
(Obviously, lots of reviews on Amazon are fake anyway, and there's all sorts of problems there too. But this would at least be something a customer could try before just blindly purchasing a product from some random 3rd-party company.)
They won't be sincere because in Asian culture it is considered an honor to be copied. To create something so unique and desirable that 1000 people try to re-create your perfection is the pinnacle.
IANAL, but what basis does Amazon have to be suing these counterfeiters?
They aren't the trademark holders. From Amazon's point of view, all they did was violate the TOS.
Shouldn't Amazon just spot them, shut them down and pass along any relevant information to law enforcement and the trademark holders and let THEM handle it? I don't think Amazon wants to be in the position where they have to play trademark police. We saw how well that worked out with the DMCA...
Yeah, I pretty clearly see that Amazon is headed down the dark road where Alibaba's always been. Amazon *used to* be a platform you could trust, at least most of the time. But now? With all these direct-from-China sellers on it? These people are sharks and they know every trick in the book.
A lot of them really don't know how to make money other than shenanigans. The idea that they should offer an honest product and run a good business, get a reputation, etc.? Foreign ideas. The counterfeiter idea is that the only way to win is to rip people off, and when they get burned and don't buy from you again, well don't worry there are billions more people out here and you don't need repeat business. A lot of these scammers operate on razor thin or zero margins, and they go bankrupt all the time. I really don't think it was a good idea for Amazon to open up to them.
What Amazon should do is go to Alibaba and hire away some of their anti-fraud department. Start playing whack-a-mole. It's just not going to get better any time soon. The winners are going to be the counterfeiters, and the losers are going to be Amazon honest sellers. It's a real tragedy.
Shutting down free speech with violence isn't fighting fascism. It IS fascism!
I really wish they would stop the practice of combining a bunch of sellers for a given product. It makes the reviews even less worthwhile because you don't know if a couple of bad sellers pushing fakes are tied to the bad reviews, nor do you know who the legitimate sellers associated with the good reviews.
Because nobody wants to buy from the "legitimate" sellers because it's twice as expensive as just buying it locally. People want to buy from the counterfeiters because their products are exactly the same quality as the legitimate ones, but at far lower prices.
Amazon doesn't want to pass up this revenue stream because they know people won't buy on Amazon if their prices are always higher than retail, but they have to do "something" because the owners of the trademarks, patents, and copyrights are screaming mad because they want extra money and profit to call something "genuine" and Amazon isn't helping them maintain their artificial monopoly.
End result, Amazon takes a couple of sellers to court, fails to actually solve the "problem", but can tell the IP rights people that they did everything they could.
The sellers a) engaged in unlawful acts which b) harmed Amazon's business. Amazon can therefore sue for damages. proving the amount of damages will be tricky, that may be negotiated.
> Shouldn't Amazon just spot them, shut them down
Yes, Amazon should close the scammers' accounts, and they do, then the scammer sets up a new account the next morning.
> pass along any relevant information to law enforcement and the trademark holders and let THEM handle it?
In one of the two cases mentioned in TFA, the trademark holder did join Amazon in the suit. That combines the trademark holder's clear legal rights with Amazon's lawyers, money, and data - potentially a powerful combination.
I have heard several people I know say that there are whole categories of product that they never buy from Amazon due to the number of fakes. They were specifically talking about hair products but it also applies to many other things. At some point people will lose faith in the platform as a whole and stop using it (ie don't bother it's all knocks offs anyway).
Before Creative Labs brought out the MuVo MP3 players, that name was attached to a music-selling site which they paid to have developed and then did not bother to go live with. I configured and documented the hardware that they didn't use. I forget, sadly, what I'd heard they did with it afterwards. It was nothing too special, just some Compaq servers with a dual-attach FC RAID. The music info came from allmusic. What was interesting (and relevant to this discussion) was the software, which implemented a web of trust review system. You'd review a reviewer and then the review scores that you saw would be biased based on that score.
In order to fix the Amazon problem, we need a web of trust review system that permits us to rate sellers. Once you find a scrupulous reviewer you can rank up their reviews. This lets the user almost completely dodge fake review scores.
"You're right," Fisheye says. "I should have set it on 'whip' or 'chop.'"
That simply isn't true, and anybody claiming otherwise is kidding themselves. At my previous employer, they were cheap and bought generic fake Lightning cables that looked like the Apple cables. The average life expectancy was about a week. By contrast, the typical life of real Lightning cables is measured in years, because unlike the fakes, the real authentication chips don't overheat and burn out when plugged into a charger all day.
But either way, with the sole exception of fashion products, the counterfeit makers are generally free to make and sell their goods, so long as they don't pass them off as legitimate. It isn't a huge burden to call something "Lightning-compatible" or whatever, and nobody would sue over that.
What causes problems is when they advertise their products as the real thing, causing their fake products to be commingled with the legitimate products sold by other sellers, and causing other folks to get blamed when they turn out to not be as good as the real thing, which they usually are not.
The products are usually not identical except in outside appearance. Often, the guts of the product don't meet minimum safety standards, and thus cannot be legally sold in the United States. But even if the products were identical, they would still have a higher failure rate, because counterfeiters typically cut costs by skipping burn-in testing, which means that all the DOA products get returned by consumers instead of getting caught early and never making it out of the factory.
Check out my sci-fi/humor trilogy at PatriotsBooks.
Better yet allow manufacturers to police their own products.
1) Allow Apple to take down any product listed with the words "official" and "Apple", "iPhone", "iPod", etc. Allow Apple to ban sellers of counterfeit Apple products (with the right of the seller to appeal). Have consequences (fees) if Apple incorrectly reports sellers so that it isn't like the DMCA with no consequences for false reporting.
2) Allow manufactures to specify a list of approved re-sellers on amazon.com. For products with a lot of counterfeits on Amazon currently, this might be the best solution.
3) Allow buyers to report counterfeit products. If enough buyers report a seller as trafficking counterfeit goods, the seller is banned. Require a field of proof in the report. Some of the counterfeit stuff I've bought off Amazon (I didn't know it was counterfeit when I bought it) were missing stickers and logos and such making it pretty obvious when you compared the real thing and the counterfeit. Sometimes the logos are wrong.
It's not like the counterfeit products are benefiting consumers. The ones I've gotten have been within 5% of the price from other retailers. There is no way a counterfeit product is worth 95% of the real deal. When I see a product on Amazon that's half it's normal price that's a pretty clear indicator that it is counterfeit, but when it's 95% of the price, there is no way to tell until it arrives if even then.
It would be complicated and a lot of work, but I don't see any other way to crack down on counterfeit products.
A lot of products I can't purchase on Amazon anymore because I am almost certain to get a counterfeit product. Amazon needs to address this issue. Lawsuits should be part of it, but it won't solve the problem. Lawsuits should only be part of the solution.
This message is encrypted with Quad ROT-13 to protect the author's copyright under the DMCA.
Not me, personally. I don't do the things Amazon is suing people (or businesses) for. But ...
You typically need to sue in a US court if you want to get any reasonable settlement that covers your effort and costs. If Amazon wins the lawsuit, and the loser doesn't pay the judgement, then Amazon can seize all their US assets.
And if the offshore vendor doesn't have any US assets?
Ummmm
Lawsuit: Fail