Amazon Hits Back at AAFA’s Criticism of Counterfeit Problem

Amazon is defending its business practices after the American Apparel and Footwear Association took aim early this month at the e-commerce giant’s purported counterfeit problem.

In a letter to the Office of the U.S. Trade Representative dated Oct. 15, the Seattle-based retailer contested the AAFA’s recommendation that Amazon be included in this year’s “Notorious Markets” list, which seeks to identify businesses that facilitate trademark counterfeiting and copyright piracy.

In its letter, Amazon shared that it has conducted monthly meetings with a group of brands selected by the AAFA to discuss brand protection measures, such as its Project Zero program, which aims to drives down counterfeit sales with the use of an automated scanning tool and a product serialization service.

“However, despite Amazon’s best efforts to engage with the AAFA [to] collaborate with its members to effectively prevent the sale of counterfeits, many of its member brands have not adopted Amazon’s brand-protection tools,” the retailer wrote, adding that only 22 brands have enrolled in Project Zero, although 51 brands were invited to adopt the program. “Further, AAFA did not attempt to raise or resolve the concerns in their filing with Amazon prior to submitting them, despite the forum that the monthly meeting provides.”

Two weeks ago, the AAFA — which represents more than 1,000 brands across the fashion industry — penned a letter to the USTR, recommending that Amazon’s marketplaces in France and India are added to the USTR’s list of “Notorious Markets.” The AAFA last year had recommended the USTR add the Amazon websites in Canada, Germany and the United Kingdom to the list but has so far been unsuccessful in such efforts.

“Despite its role as a leader in the worldwide retail landscape, and as an important selling partner for many of our member brands, Amazon continues to present significant counterfeit challenges,” said AAFA president and CEO Rick Helfenbein. “While we are happy to have seen increased engagement with Amazon on brand protection issues during the past year, that engagement regrettably has not translated into a discernible decrease in counterfeits of our members’ products on Amazon’s marketplaces.”

In yesterday’s letter, Amazon also shared that, in 2018, it had invested upwards of $400 million in staffing as well as hiring 5,000-plus employees to help fight fraud and abuse. More than 1 million “suspected bad actors,” Amazon wrote, were prevented from publishing products for sale, and roughly 3 billion “suspected bad listings” were blocked from its digital stores.

“We know that customer trust is hard to win and easy to lose, and we view counterfeiting as an existential threat: If customers do not trust what they purchase through Amazon’s stores, they can and will shop elsewhere,” the letter read. “That is why we go well beyond our legal obligations and invest heavily in proactive efforts to prevent counterfeits from ever reaching our stores.”

Overall, eight online markets — including China’s WeChat platform and the U.S.-based Wanelo — as well as 130 physical stores were identified this year by AAFA member companies as participating in the sale of counterfeit goods. FN has reached out to the AAFA for further comment.

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