“As the number of Americans relying on e-commerce grows in response to the effects of the COVID-19 pandemic,” the American Apparel & Footwear Association (“AAFA”) says that the volume of counterfeit goods being offered up online has “exploded.” In a new submission to the U.S. Trade Representative, the AAFA asserts that the “lack of sufficient brand protection measures on Amazon, Facebook, and Instagram platforms” contributing to the sale of a sizable portion of the growing-number of illicit products, and the trade body should keep that in mind when compiling its 2020 list of online and physical markets that reportedly engage in and facilitate substantial copyright piracy or trademark counterfeiting.
In its 14-page submission to the U.S. Trade Rep for the 2020 Special 301 Out-of-Cycle Review of Notorious Markets, the AAFA asserts that “theline between e-commerce and social media platforms has blurred in recent years,” resulting in a boom in social commerce and a ripe new home for the offering up of counterfeit goods via otherwise “legitimate marketplaces.” Against that background and citing “input from [its] members and growing research showcasing the prevalence of counterfeits and fraudulent advertising on [the Facebook] platform,” the AAFA has recommended the inclusion of Facebook, including its Instagram platform, as part of the Notorious Markets report.
The AAFA says its members – including Calvin Klein, Canada Goose, Jimmy Choo, Marc Jacobs, Stuart Weitzman and Ralph Lauren – are “directly and adversely impacted by the sale of counterfeit goods through online third-party marketplaces,” such as Amazon, which is why it has re-nominated Amazon, whose foreign domains were included in the 2019 Notorious Market report, noting that “although AAFA members report increased progress and cooperation with Amazon over the past year, the number of counterfeits on the platform and the systems developed to address them remain mismatched.”
“While we welcome the progress Amazon has made to date, we believe more needs to be done to ensure sustained, irreversible progress in the fight against counterfeits on Amazon’s marketplaces, particularly in the COVID-era where the rise of counterfeiting has more than matched the rise of e-commerce globally,” the AAFA asserts in its November submission. “As one member explains: ‘Amazon is getting better, but they define low expectations and begrudging incrementalism. We think they could be doing a lot more.’”
According to the AAFA’s letter, another one of the its members stated specifically in connection with Amazon that “all the European marketplaces (UK, Germany, Spain, France, and Italy) are flooded with large scale sellers of counterfeit, print on demand goods, selling under made up brand names, that are shipped from China. We frequently report these listings but do not find Amazon quashes the sellers.”
For the 2020 list, the trade group is urging the U.S. Trade Rep to name Amazon, “including both its U.S. and foreign domains” given the “volume of counterfeits available across Amazon; [its] insufficient seller vetting process; [the existence of] repeat offenders on the platform; and [enduring] challenges with Amazon’s brand protection systems.”
In terms of Facebook, the AAFA “believes a recommendation for Facebook, Inc. – including the Facebook and Instagram platforms—should be included in the 2020 Notorious Markets List for three reasons: (1) volume of counterfeits available across Facebook and Instagram; (2) lack of effective intellectual property tools; and (3) increase in fraudulent ads.”
Both Facebook and Instagram “see the same issue of accounts specifically set up to sell counterfeit goods,” the AAFA asserts, alleging that “Facebook, Inc. appears to take no restrictive action against accounts that are specifically created to sell counterfeits, with names like ‘replicas_deutschland01’ and ‘top.quality.replicas,’ which should act as red flags as to their infringing content.” It continues on to state that “multiple preventative suggestions are declined by Facebook due to prioritization of ‘free speech’ – for example, blocking specific hashtags such as #counterfeit or #designerreplica.”
“While we embrace the growth of e-commerce, unfortunately, counterfeiters have as well, taking advantage of these circumstances globally and flocking to sell their fake goods online,” the AAFA asserts, with its members reported “massive spikes in illicit activity occurring on online marketplaces” – and in connection with social media platforms – “during the first half of 2020.”
“Now more than ever,” the group states, “it is critical for online marketplaces to take the necessary steps to prevent their platforms from being misused, and, more importantly, to protect consumers from unwittingly being sold fake products during a global health crisis.”
An Amazon spokesperson told TFL in response to the AAFA’s submission, “Amazon and AAFA share a common interest in combatting counterfeits. As AAFA stated, we have had regular, productive dialogue with many of its member brands and together, we have made significant progress: leveraging Amazon’s advanced technology and brands’ expert knowledge of their products, Amazon’s automated systems have proactively stopped more than 14 million suspected bad listings for AAFA brands. The results and progress we can make when we work together is indisputable and our efforts have ensured that more than 99.9 percent of pages viewed by customers did not have a valid notice of counterfeit infringement.”
The spokesperson further asserted, “We strongly disagree with AAFA’s recommendation and are disappointed that certain AAFA members have been unwilling to partner with us directly, despite our proven results. We know that stopping counterfeit requires retailers, brands, and law enforcement to work together and while we will continue to engage with AAFA, we look forward to those brands that have not come to the table, to do so.”
A Facebook Company Spokesperson told TFL, “We disagree with AAFA’s submission, which does not accurately capture the extensive measures Facebook has developed to protect IP rights and tackle counterfeits and piracy on our platform. We have worked extensively with the AAFA and its members, among other rights holders around the world, to inform the measures we have in place and continue to invest heavily in building industry-leading IP protection and anti-counterfeiting technologies to ensure that people and businesses that use Facebook products have the best experience possible.”