US announces crackdown on counterfeit products sold online

The Trump administration on Friday announced it is cracking down on the mass of counterfeit products sold online, threatening a legal and legislative response to the hundreds of billions of dollars of fakes sold on platforms like Amazon every year.

The push by the Department of Homeland Security (DHS), laid out in a 54-page report, comes on the heels of a trade agreement with China that requires Beijing to take stronger action against counterfeit goods. The majority of fake and imitation products seized by U.S. Customs and Border Protection (CBP) over the past two decades arrived from China and Hong Kong, according to U.S. government data.

“Historically, many counterfeits were distributed through swap meets and individual sellers located on street corners,” DHS wrote in the report. “Today, counterfeits are being trafficked through vast e-commerce supply chains in concert with marketing, sales, and distribution networks.”

The rise of e-commerce platforms like Amazon and eBay have led to an enormous flood of counterfeit goods in U.S. markets, opening the door for shady sellers to gain prominence and sell cheap knock-offs of products like purses and toys across the world’s most powerful retail platforms. 

Those e-commerce platforms all maintain policies against counterfeit and pirated goods, but they often struggle to police what is real and what isn’t. Now, DHS says law enforcement will be seeking out any and all fake products and using “all available statutory authorities to pursue civil fines and other penalties against these entities.”

They’re planning to target North American warehouses in particular, giving CBP more authority to oversee packages in the warehouses and business owners to engage in “bulk abandonment and destruction of contraband goods.” 

The vision laid out by DHS in the report involves greater law enforcement participation, more concrete action by private businesses and future congressional action. 

“The flood of counterfeit and pirated goods now being trafficked to American consumers through online third-party marketplaces is threatening both the public health and safety as well as national security,” the report, which is addressed to President Trump, reads. 

The Internet Association, a tech trade group, in a statement defended the industry’s “clear anti-counterfeiting policies.”

“IA members have clear anti-counterfeiting policies, coordinate with law enforcement agencies, and have transparent and innovative reporting and prevention tools to identify and remove counterfeit goods,” the group said. “The industry will continue to work with law enforcement, policymakers, and industry to protect consumers from counterfeit goods.”

Amazon said it welcomes extra resources from law enforcement to pursue bad actors abusing its platform.

“We know that trust is hard to earn and that’s why we’ve invested more than $400M to protect our store from fraud, including counterfeit or non-compliant products,” Amazon said. “We already have programs and processes that go well beyond our obligations under US law.”

The online retail giant has pledged to begin reporting confirmed counterfeiters to law enforcement this year.

Updated 7:50 P.M.