Amazon’s issues with illicit goods are heating up internationally, and an adviser to the EU’s top court believes the company should take responsibility for the third-party products sold on its platform.
Amazon’s recent entanglement involves cosmetics company Coty, which alleged that the online giant sold unauthorized versions of its German subsidiary’s Davidoff perfume through third-party sellers.
Coty insisted that these practices violate its trademark rights, and that Amazon should be held accountable for having stocked the products. After Coty’s initiation of legal action through case C-567/18 Coty Germany, the German court sought input from the Court of Justice of the European Union (CJEU), Reuters reported.
Companies that aren’t aware of trademark infringements can’t be held liable for storing those products on behalf of third-party sellers, Manuel Campos Sanchez-Bordona, advocate general at the CJEU, said. He conceded, however, that if they take an active role in distributing the goods through a “scheme” like Amazon’s “Fulfilled by Amazon” program, they have a duty to assess the legality of the goods sold on their platforms.
The program allows third-party sellers to store their goods in Amazon warehouses and have them delivered by the company. Fulfillment through Amazon allows third-party sellers to take advantage of the company’s shipping options (like one- or two-day free Prime shipping), while adding an air of legitimacy to their products through their closer association with the retailer.
Companies cannot wash their hands of the responsibility of regulating the products on their platforms, and if they do, they risk serving as a channel for “illegal, counterfeit, stolen or unethical products,” Campos Sanchez-Bordana said, according to a statement obtained by Reuters.
Amazon insisted that the steps it has taken to combat fakes and illicit products on its marketplace have been extensive. Amazon “continues to invest heavily in fighting bad actors” on its store, and is “committed to driving counterfeits to zero,” the company said in a statement.
“Courts have ruled in our favor in the first two instances of this proceeding, and we are now awaiting preliminary legal clarification from the CJEU,” Amazon said.
The court is likely to rule on the case within the next two to four months, Reuters reported, and usually follows the non-binding recommendations of its advisers.