E-commerce websites are now the perfect free-flowing platforms to enable and facilitate the distribution of an inexhaustible supply of counterfeit, fake, and replica goods -- a $4.5 trillion global criminal enterprise
November 17, 2022, Los Angeles, CA – Consumers love a good deal and will flock to the internet for Black Friday bargains. However, online shopping may be risky, dangerous, and little, if any, actual value. A Red Points survey found that 68% of consumers were worried about buying fake or low-quality goods online.
The Counterfeit Report, an award-winning consumer advocate and industry watchdog, has removed listings for over 430 million counterfeit items offered on e-commerce websites, including eBay, Amazon, Walmart, Wish, Newegg, and Alibaba. Still, the problem has spiraled out of control as website brand-protection programs are ineffective, dysfunctional, or deliberately obstructive.
Over 700,000 brand owners have signed up to fight Amazon counterfeits, a glaring representation of the enormity of the counterfeit problem and the challenges facing consumers. Yet Amazon repeatedly ignores trademark owner complaints, requires test purchases for products that don't exist in the manufacturer's product line, and blocks email and faxed complaints.
Trademark owners struggle for weeks to have Walmart and Newegg remove infringing listings, yet they allow sellers to relist the items.
eBay repeated denial of patent owner infringement complaints claiming they "...require expertise in the field of your invention, which eBay does not have," is appalling. However, eBay blocks all accounts and test purchases by The Counterfeit Report.
Alarmingly, the e-commerce giants usually do not notify buyers they received a fake or harmful item after receiving brand owner counterfeit notifications and have skirted secondary liability for enabling the sale of counterfeits.
E-commerce websites are now the perfect free-flowing platforms to enable and facilitate the distribution of an inexhaustible supply of counterfeit, fake, and replica goods -- a $4.5 trillion global criminal enterprise. There is little consequence for the websites, and worldwide sellers operate freely while consumers spend good money on bad products. Consumers have a legal remedy for fake or harmful products bought from brick-and-mortar stores, but no such protection exists for products from third-party online sellers.
Before buying online from the e-commerce giants, consumers should consider these facts;
The advertised bargain may be no bargain at all. Shoppers may find better deals by carefully shopping competitors and local retailers.
Amazon search results and product reviews are no indication of authenticity or quality, and may not even be related to the product searched. Amazon's review system is awash in fraud, paid endorsements, and manipulation by the e-commerce sites themselves. Worldwide scammers work to outsmart and trick ranking systems with fake reviews and ratings. Amazon and eBay block or remove negative consumer reviews.
Amazon is a direct retailer of counterfeit goods, "ships from and sold by Amazon.com," in addition to enabling and facilitating counterfeit goods sales from unvetted worldwide marketplace sellers. Amazon Prime membership, Amazon Warehouse Deals, and the Fulfilled by Amazon ("FBA") offerings are plagued with counterfeit, fake, replica items and illusory endorsements. The coveted "Amazon's Choice endorsement regularly lands on counterfeit and fraudulent products. Amazon VP Dharmesh Mehta testified to Congress that "Amazon does not manually curate products. There is no unique safety testing for the "Amazon's Choice" products. There is no unique screening for authenticity to receive that badge."
Walmart consumers who believe they are buying legitimate, safe products online may be in for a surprise. Walmart is both a direct seller of counterfeit, fraudulent, and dangerous items and allows third-party marketplace sellers to offer these goods on its website. The Counterfeit Report purchased dozens of counterfeit or fraudulent computer memory cards, flashlights, and batteries from Walmart as the direct seller.
eBay has migrated from the auction house of garage sale items to a global "Marketplace" seller model. Unvetted marketplace sellers are about 80% of eBay's business and can sell just about anything they want on eBay, including fakes. eBay sales figures reflect consumer purchases of over 985,000 counterfeit, fraudulent, and replica items from just the tiny sample of products investigated by The Counterfeit Report - who purchased over 2,300 counterfeits from eBay sellers and removed listings for over 2.3 million fakes.
Alibaba and its subsidiary AliExpress are 'go-to" websites for counterfeits and replicas and should be avoided. Both serve as a first stop for brand owners to check if their products are counterfeited. This marketplace model landed Alibaba (appropriately named after the fable "Ali Baba and the 40 Thieves") and some Amazon websites on the U.S. Government's Notorious Markets List -- a designation reserved for the world's most notorious markets for counterfeit goods.
Wish.com consumers may be attracted to its brand-name products offered by China sellers at a fraction of retail. Shipping may take weeks or over a month for customers who prioritize savings over speed of delivery. However, many items are counterfeit, fake, or replica products. Wish.com, a 2011 newcomer, built its fast-growing e-commerce business by offering a vast range of products that are "discounted" as much as 90 percent.
Newegg.com is an American company and direct retailer of items, including computer hardware and consumer electronics. Newegg also enables marketplace sellers, many from China, to offer counterfeit, fraudulent, and replica items. Counterfeit computer memory is not uncommon, and marketplace offerings have expanded to counterfeit auto diagnostic equipment, beauty products, first-aid devices, and fraudulent batteries. The Counterfeit Report removed listings for over 498,000 counterfeit, fraudulent, and replica items identified on Newegg.
A U.S. Government Accountability Office ("GAO") undercover investigation of e-commerce counterfeit goods sales revealed that about 50% of the items it purchased from eBay, Walmart, Newegg, and Amazon were counterfeit.
Consumers would be better served to shop at local retailers or online with the major authorized retailers (Kroger, Costco, Home Depot, Target, Lowes, Best Buy, etc.), offering consumers competitive purchase options for authentic products.