Amazon stopped more than 2.5 million attempts to create fraudulent selling accounts in 2021, according to the e-commerce giant’s second annual Brand Protection Report. The Seattle company said it identified, seized and disposed of more than 3 million counterfeit products as well.
The fraud attempts are have decreased significantly from the more than 6 million in the prior year, which Amazon attributes to “robust seller and product vetting.”
In the Brand Protection Report, Amazon pointed to its continuous monitoring for potential infringement as a catalyst to block these attempts. The tech titan says its automated technology scanned more than 8 billion attempted changes to product detail pages daily for signs of potential abuse, compared to more than 5 billion in 2020.
The report, which highlights Amazon’s commitment to the authenticity of goods sold in its store and fighting fraudsters, details progress in three areas: proactive efforts to protect Amazon’s store; sellers’ increasing adoption of its brand protection tools; and holding bad actors accountable.
As part of the proactive efforts, Amazon blocked more than 4 billion bad listings before they were listed on the site. These listings were suspected of being fraudulent, infringing, counterfeit, at risk of other forms of abuse or presenting significant product quality concerns.
In 2021, Amazon said it invested more than $900 million and dedicated more than 12,000 people—including machine learning scientists, software developers and expert investigators—to protecting customers, brands, selling partners, and their store from counterfeit, fraud, and other forms of abuse. This topped the $700 million spent in brand protection efforts to close out 2020.
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“Our team continues to innovate to stay ahead of bad actors while working in partnership with rights owners, law enforcement, and other experts to ensure customers can continue to shop with confidence,” said Dharmesh Mehta, Amazon’s vice president of selling partner services. “While we are proud of the progress we have made, we will not stop until we drive counterfeits to zero in our store.”
Amazon sellers leverage brand protection tools
Amazon indicated that sellers are warming up its Brand Registry service, a suite of tools designed to help them manage and protect their brand and intellectual property rights on the marketplace. The service grew to include more than 700,000 active brands, an increase of 40 percent from the prior year.
At the same time, the average number of valid notices of infringement submitted to Amazon by a brand in Brand Registry decreased by 25 percent from the prior year.
One tool in the Brand Service suite, the IP Accelerator, connects sellers with a curated network of IP law firms, which provide trademark registration services at what the e-commerce giant calls “competitive” rates. In 2021, more than 5,900 small and medium-sized businesses (SMBs) were connected with law firms through IP Accelerator.
Amazon’s advanced anti-counterfeiting technology, Project Zero, enrolled an additional 2,000 brands, increasing the total number of brands using to tech to more than 20,000. Among Project Zero brands, for every one listing removed by a brand, Amazon’s automated protections proactively removed more than 1,000 suspected infringements.
Third-party sellers on Amazon also can use Transparency, an anti-counterfeiting service that uses product serialization service that prevents counterfeits from reaching customers around the world.
Brands label every single unit of a selected product with a unique code, which can be scanned to verify the unit’s authenticity throughout the supply chain. While any retailer can choose to verify these codes, for products enrolled in Transparency, Amazon verifies 100 percent of these product units. Amazon says that items without a valid code are identified and stopped, in an effort to ensure that only genuine products reach customers.
In 2021, more than 23,000 brands starting using Transparency, an increase of 35 percent compared to 2020. Transparency also enabled the protection of more than 750 million product units, a 50 percent compared to 2020.
Bad actors aren’t just caught, they pay the price
Amazon’s history with counterfeiting hasn’t always been great, with Nike and Birkenstock leaving the e-commerce giant in recent years due to their claims that it wasn’t doing enough to curb the problem.
To illustrate how seriously it took the counterfeiting issue on its marketplace in the wake of these exits, Amazon established the Counterfeit Crimes Unit (CCU) in 2020.
“In two years, CCU has established its reputation as a global partner to brands and law enforcement through our aggressive enforcement against counterfeiters,” Kebharu Smith, director and associate general counsel, CCU, Amazon, said in the report. “Our mission is to disrupt and dismantle these networks by pursuing their illicit proceeds, seeking criminal prosecution, and securing civil judgements and injunctions to ensure that consumers only purchase authentic and safe goods and bad actors are held to account.”
Amazon has since partnered with brands in high-profile counterfeiting crackdowns including Hanesbrands, Valentino, Weber, Salvatore Ferragamo, Yeti, GoPro, Whirlpool and Procter & Gamble to pursue bad actors worldwide. Amazon filed civil litigation against more than 170 counterfeiters in U.S. courts throughout the year.
Across the U.S., U.K., the E.U. and China, Amazon sued or referred over 600 criminals for investigation, an increase of more than 300 percent over 2020.
In October 2021, information from the CCU led to a joint operation with U.S. Homeland Security Investigations (HSI) and the Los Angeles County Sheriff’s Department (LASD) which resulted in the seizure of counterfeit automotive goods worth more than $1.2 million. These parts posed a potential risk to consumers as they impeded automotive safety sensors. The blocked shipment protected not only Amazon’s customers, but also customers who shop at other retailers where the counterfeiters intended to sell their products.
Most recently, Amazon and Salvatore Ferragamo teamed up to offer intelligence to China’s Market Supervision and Administration (MSA) authorities in the Zhejiang Province, who raided a warehouse and seized counterfeit belts and buckle accessories.