Counterfeits are becoming an image problem for the online retailer.
(Photo: Bloomberg)
Dusseldorf The official replicas of the World Wrestling Federation’s title belts are coveted by fans, with prices ranging up to $500. This attracts scammers who sell deceptively similar fake belts through internet marketplaces.
Now Amazon is cracking down on these counterfeiters. Together with World Wrestling Entertainment (WWE), the retailer files an indictment against 13 suspects who are said to have sold counterfeit wrestling belts via the platform. “The counterfeits resemble official and licensed WWE products, which are our intellectual property,” said Matthew Winterroth, WWE’s vice president of intellectual property.
It’s not the first strike by Amazon’s Counterfeit Crimes Unit (CCU). Formed two years ago, the department of former FBI agents and data analysts has shut down more than three million counterfeit products and brought more than 600 fraudsters to justice in the past year. And it’s also about much more delicate products than wrestling belts.
And gigantic sums are converted with it. According to estimates by the OECD and the European Union Intellectual Property Office (Euipo), product piracy generates an annual turnover of more than 500 billion dollars worldwide. That is around 3.3 percent of world trade.
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Imports of counterfeit products into the European Union (EU) amounted to €119 billion in 2019, according to the Global Trade in Fakes report. Domestic transactions were not even recorded. The pandemic is likely to have exacerbated the problem of counterfeit products because scammers specifically relied on corona tests and protective clothing that were initially scarce.
Even spare parts for cars and corona tests are counterfeited
This is about far more than financial damage for the manufacturers. Because product counterfeiting can also have serious consequences for customers: The report “Dangerous Fakes” by the OECD and Euipo shows that criminal counterfeiters are increasingly selling goods that could pose health, safety and environmental risks.
Fraudsters most frequently counterfeit clothing and cosmetics. But the counterfeiters are now increasingly targeting car spare parts and medicines. The general rule is: what is rare or expensive is counterfeited more often.
What is rare or expensive is more likely to be counterfeited.
(Photo: Amazon)
According to Europol, counterfeit products are increasingly being sold via e-commerce platforms. The perpetrator structure ranges from lone perpetrators to professionally organized counterfeiting gangs to organized crime.
This means that counterfeiting is increasingly becoming an image problem for Amazon. For many years, traders were able to sell their goods largely uncontrolled via the platform. Hardly anyone checked whether the goods were really originals. But the large number of counterfeits increases the pressure on the company, and credibility with customers is at stake.
Since the founding of the CCU, Amazon and the affected brand manufacturers have now been able to report numerous successful searches. In June, Amazon and luxury manufacturer Cartier filed two lawsuits against scammers who, among other things, counterfeited Cartier’s iconic Love bracelet. Influencers who advertised the sale of counterfeits on Instagram are also accused.
Former FBI agents track down the counterfeiters
Other luxury brands such as Salvatore Ferragamo and Valentino have already filed lawsuits, as has camera manufacturer GoPro – and now wrestling marketer WWE. “We hope that other companies will follow suit. It can be worthwhile for a company of any size to take action against counterfeit products together with the CCU,” says WWE Manager Winterroth.
The actual investigative work is done by the CCU, whose head, Kebharu Smith, previously worked as an expert on computer crimes at the US Department of Justice. “We’re using Amazon’s vast database to identify the individuals behind the scams,” Smith said. But the road to court-proof evidence is often long.
>>Read here: The billion problem: How Amazon’s investigators fight counterfeiters
The detective work is based, for example, on the combination of IP addresses, log-in data, bank details and e-mail addresses. Amazon and the brand manufacturers then hand over their findings to the state authorities.
In the current case, the alleged scammers are said to have tried to hide their identities and location. One of the defendants is said to have operated out of New Jersey. The counterfeit products have since been removed from the platform by Amazon and are no longer available.
“Amazon is committed to the authenticity of the products in our store and to protecting our customers from all forms of counterfeiting,” said CCU CEO Kebharu Smith. “We will continue to work with WWE and law enforcement to bring the actors to justice.”
More: The billion problem: How Amazon’s investigators fight counterfeiters