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The Latest on Amazon Crackdowns on Counterfeits and Paid Reviews

Amazon
Amazon

Amazon reached a settlement with two defendants in a lawsuit it had filed in November against two social media influencers and numerous sellers, announcing today that the scheme had promoted counterfeit luxury brand products on Instagram, TikTok, and Facebook by allegedly directing customers to product listings in Amazon’s store that evaded counterfeit measures.

In its November 2020 announcement, Amazon alleged that the two influencers posted on social media sites side-by-side photos of a generic, non-branded product and a luxury counterfeit product with the text, “Order this/Get this.”

Posting generic products on Amazon but fulfilling counterfeit goods was an attempt by the pair’s alleged co-defendants to evade anti-counterfeit protections.

CNBC’s story about the case from November included one image of an alleged post on Instagram showing a generic black tote bag next to the words “order this” above a designer brand tote bag next to the words “get this” along with a second image of an Amazon listing for the generic black tote bag that was allegedly designed to fool Amazon’s counterfeit-detection tools.

Amazon said that as part of the settlement, the two influencers would make settlement payments that it will donate to pro-intellectual property charities and said the pair would “unconditionally cooperate with Amazon’s investigation of, and legal action against, the remaining defendants, as well as suppliers and other bad actors who are involved with the promotion and sale of counterfeit products.”

Kebharu Smith, Director of Amazon’s Counterfeit Crimes Unit, was quoted in today’s announcement: “We are pleased that this settlement has resulted in the individuals recognizing the harm they caused, assistance for our investigation moving forward, and that charities will benefit from the recovered funds. This settlement sends a strong message to would-be bad actors that Amazon will find you and hold you fully accountable.”

In related news, The Verge reported yesterday that several Chinese companies filed a class action lawsuit against Amazon this month for withholding funds that they allege in the complaint are “legally and rightfully due to thousands of Amazon sellers and merchants.” It appears related to recent reports that Amazon banned hundreds of Chinese brands over claims they had paid for customer reviews, which is against Amazon’s terms of use.

According to The Verge, “The companies don’t deny that they violated Amazon’s policy. Their problem is that Amazon is withholding “several hundred dollars to hundreds of thousands of dollars” of their claimed earnings.”

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Ina Steiner
Ina Steiner
Ina Steiner is co-founder and Editor of EcommerceBytes and has been reporting on ecommerce since 1999. She's a widely cited authority on marketplace selling and is author of "Turn eBay Data Into Dollars" (McGraw-Hill 2006). Her blog was featured in the book, "Blogging Heroes" (Wiley 2008). Follow her on Twitter at @ecommercebytes and send news tips to ina@ecommercebytes.com. See disclosure at EcommerceBytes.com/disclosure/.