As e-commerce continues its steady growth, bad actors are proliferating across web-based channels. Counterfeiters have infiltrated online marketplaces across the globe, peddling fakes with abandon.
The company invested more than $700 million in fraud protection efforts last year, including employing more than 10,000 people tasked with stopping the abuse.
As a result of these efforts, detailed in its 2020 Brand Protection Report, Amazon claimed that just 6 percent of attempted seller account registrations passed its verification processes and these actors were able to list products for sale. The company’s augmented verification processes halted 6 million attempts to create dupe selling accounts—a significant increase from the 2.5 million attempts it saw and stopped in 2019. “It was driven by increased bad actor attempts to get into our store that we successfully thwarted,” wrote Dharmesh Mehta, Amazon’s vice president of worldwide customer trust and partner support.
Still, criminals successfully wormed their way into Amazon’s massive marketplace of third-party sellers in the past, and the company is also working to root out those operations and remove them from the site. According to the report, Amazon seized more than 2 million products that were sent to its fulfillment centers last year, flagging them as fakes before they were sent to shoppers. The company said it destroyed those items to guard against their being sold elsewhere. It also blocked more than 10 billion listings it suspected to be fraudulent before they hit the web.
When it comes to tactics, Amazon said, the increased implementation of tools like its Transparency serialization service, along with Brand Registry—which allows trademark owners to assert control over who lists their products for sale and how they’re presented on the site—have proven invaluable in guarding against predatory actors. “Brands know their products best. They know their logos, patterns, and intellectual property inside and out,” Mehta wrote.
Project Zero, a service powered by Amazon’s machine learning, also continuously scans sellers’ stores and proactively flags suspected fakes based on the proprietary information that brands provide to the site.
“In 2020, we continued to enhance these tools and grow the number of brands that use them,” Mehta added. “The number of brands using Transparency grew from 10,000 to more than 15,000, and the number of brands using Project Zero grew from 10,000 to more than 18,000.” Transparency, which protects individual product units using bar codes, safeguarded more than 500 million items.
An integral part of helping small and medium-sized businesses grow is enabling them to protect their intellectual property, Mehta added, pointing to Amazon’s newly expanded IP Accelerator. While securing rights to names, logos, product designs and other important brand indicators is essential, it can also be a confusing and costly process. According to Mehta, just 9 percent of SMBs in the E.U. register their intellectual property, while larger businesses are four times more likely to do so.
Amazon’s IP Accelerator, which expanded to France, Germany, India, Italy, Japan, Netherlands, and the U.K. last year, connects entrepreneurs and small business owners with a curated roster of law firms that have been vetted by the company itself. With the agreement to stick to competitive, pre-negotiated rates, brands can receive help filing trademark applications. According to the company, more than 7,000 businesses were successfully connected to firms that helped them submit trademark applications, and they received early access to Brand Registry protection tools in the process.
While Amazon’s suite of tech tools to combat counterfeits continues to grow in use, the firm has also devoted resources to building out an internal task force to help brands navigate the legality of claims against illicit sellers. “In 2020, we established a new Counterfeit Crimes Unit to build and refer cases to law enforcement, undertake independent investigations or joint investigations with brands, and pursue civil litigation against counterfeiters,” Mehta said.
The team has been tasked with undertaking both independent and joint investigations with brands, he added, and through collaborative efforts, many of the suits were filed jointly with household name labels—including luxury fashion houses Valentino and Ferragamo.
“The joint action with Amazon underlines how the protection of intellectual property is a priority for Ferragamo and how the company is pursuing the fight against counterfeiting with full awareness and resolution,” Micaela le Divelec Lemmi, CEO of Salvatore Ferragamo, said in a statement.
The new program, along with the expansion of existing tools, has put the company on track to eradicate counterfeits on its platform, according to Mehta. Throughout 2020, fewer than 0.01 percent of all products sold on Amazon were subject to counterfeit claims from shoppers.
“This is an escalating battle with criminals that attempt to sell counterfeits, and the only way to permanently stop counterfeiters is to hold them accountable through litigation in the court system and through criminal prosecution,” he said. “We continue to innovate on our robust proactive controls and our powerful tools for brands, and we won’t rest until we have zero counterfeits in our store.”