How Big Is Amazon’s Counterfeit Problem

By Douglas A. McIntyre Updated Jan 11, 5:02PM EST · Published Oct 2, 9:45AM EDT

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Amazon.com Inc. (NASDAQ: AMZN) has had counterfeit problems for years. Its marketplaces allow America’s largest e-commerce company to sell tens of millions of its own products and those from other retailers. More and more of those retailers complain that some merchandise sold on Amazon are fakes.

Amazon was hit by a powerful new accusation from the American Apparel & Footwear Association (AAFA), which represents over 1,000 manufacturers, retailers and owners of major brands sold at retail. The association claims its members employ almost 4 million workers and combined have over $384 billion in U.S. sales.

The AAFA reports that the major problem is U.S. goods sold in Germany, Canada and the United Kingdom. Its complaint was filed with the Office of the United States Trade Representative and stated some countries make the sales of counterfeits relatively easy. In the filing the AAFA said:

The submission was part of USTR’s 2018 Special 301 Out-of-Cycle Review of Notorious Markets, which identifies foreign physical and online marketplaces that reportedly engage in and facilitate substantial copyright piracy and trademark counterfeiting.

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This is by no means the first complaint about the Amazon marketplaces issue. An organization called The Counterfeit Report identifies fake goods sold at Amazon, eBay and China’s Alibaba. It keeps a scorecard of where these fakes are sold. eBay is first at 61% and Amazon second at 13%. The Counterfeit Report recently accused Amazon of including fake goods in its “Amazon’s Choice,” which is essentially a product endorsement.

Counterfeits sold at Amazon, eBay and Alibaba include knock-offs of products like Tide, Gillette, Nike and Rolex.

Amazon does have an anti-counterfeiting program. If it identifies products that are counterfeit, it “may result in loss of selling privileges, funds being withheld, and destruction of inventory in our possession.” According to the AAFA, that is not nearly enough, so buyers have to beware.

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About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.