Retailers are banding together to take on a common enemy: counterfeits. Specifically, those that have proliferated, largely unchecked, on popular online marketplaces.
The newly formed Buy Safe America Coalition, which announced its establishment Friday, is made up of more than a dozen industry associations including the American Apparel and Footwear Association (AAFA), the Fashion Jewelry and Accessories Trade Association, and the Retail Industry Leaders Association (RILA), which counts Walmart and Target among its members. The Coalition’s aim is to bolster legislation that would prompt digital platforms to perform more stringent vetting of third-party sellers.
Marketplaces like Amazon have exploded in popularity due to the unparalleled breadth of their assortment and their impossibly low prices, but those benefits have come at a cost—both to brands, and to consumers. In recent years, Jeff Bezos’ behemoth of a business has been fingered by government bodies and brands alike for the rampant counterfeits and illicit listings across its site.
While many shoppers believe they’re simply getting a great deal, deep dives into the company’s practices have shown that the too-good-to-be-true prices on items like Nike sneakers and makeup are often just that. In fact, the athletic wear giant famously severed ties with Amazon late last year reportedly out of frustration over the prevalence of unauthorized Nike sellers hawking its shoes and clothes.
According to Bloomberg Business, the creation of the Coalition provides a unified lobbying body to pressure lawmakers to take action against all marketplaces that traffic in the sale of illicitly-gotten or fake products. Michael Hanson, senior executive vice president of public affairs at RILA, told the publication that the group’s goal was to “continue to raise awareness about counterfeit and stolen goods” among lawmakers. “Now, with the growth of people buying online because of this pandemic, it seems that this is getting worse,” he said.
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The first piece of legislation that the group is backing is the INFORM Consumers Act, requiring digital vendors who rely on third-party sellers to collect more information about them and their businesses before giving them carte blanche to make sales. The bill was first introduced in March by Senator Bill Cassidy (R-La.) and Senator Dick Durbin (R- Il.), and was followed by a complementary version in July spearheaded by Rep. Jan Schakowsky (D-Il.) and Rep. Kathy Castor (D-Fl.)
Under the potential law, Government IDs, tax IDs and bank account details would be among the criteria solicited from sellers. High-volume sellers that make more than 200 sales each year amounting to at least $5,000 would also have to disclose their names, phone numbers, business addresses and emails.
The issue has gained traction within the four walls of the White House, Bloomberg Business reported. The Department of Homeland Security recommended in January that the Trump administration take legal actions to crack down on third-party marketplaces selling fakes, implement more detailed tracking on packages mailed from other countries, and create a consumer awareness campaign to inform shoppers of online risks.
The continued issues with counterfeits are almost certainly adding to Amazon’s stress over the ongoing federal anti-trust investigation into its use of third-party seller data for its own corporate gain. In an attempt to address the issue of fakes on its site—and perhaps get out ahead of government intervention—the company announced in July that it would be displaying sellers’ business names and addresses on their profile pages. This includes individuals selling on the site, whose names and addresses will also be listed, beginning Sept. 1.
“These features help customers learn more about the businesses of a seller and the products that they are selling,” the company wrote in an advance notice on its Seller Central forum. “We are making this change to ensure there is a consistent baseline of seller information to help customers make informed shopping decisions.”