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Amazon, Facing UK Scrutiny, Files Counterfeit Lawsuit with Hanesbrands

Already facing mounting regulatory concerns in the U.S., Amazon appears to be attracting even more unwanted attention across the pond.

Mark the United Kingdom as the latest country taking umbrage with Amazon’s business practices. The U.K.’s top watchdog is reportedly planning a formal competition investigation into Amazon, according to the Financial Times. And to make matters worse, the e-commerce giant is facing a potential $425 million fine from an E.U. privacy regulator.

The U.K.’s Competition and Markets Authority (CMA) reportedly has been examining Amazon’s business for months, concentrating on how it uses the data it collects on its platform.

Additionally, the watchdog has inspected how Amazon decides which merchants appear in the critical “Buy Box,” which gives select items the greatest visibility on a product detail page and enables shoppers to add it to their shopping cart in one click. An investigation may focus on whether Amazon favors sellers that also use its logistics and delivery services when deciding who has access to both the Buy Box and its Prime customers, according to the report.

The timing and the depth of the CMA investigation are still unknown, but are currently being worked on, FT reported.

Amazon did not immediately respond to a request for comment.

The potential U.K. investigation would be yet another global probe into the e-commerce giant’s business practices. Multiple probes worldwide have already been opened against Amazon, including inquiries in the U.S., two in the E.U. and one in India.

And Amazon’s methods of collecting shopper data are keeping E.U. privacy regulators busy as well. Mere hours after the FT report published, a Wall Street Journal report indicated that one such regulator has proposed fining Amazon over $425 million related to alleged violations of Europe’s General Data Protection Regulation (GDPR), linked to the tech titan’s collection and use of personal data.

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Luxembourg’s data protection commission, the CNPD, has circulated a draft decision sanctioning Amazon’s privacy practices and proposing the fine among the E.U.’s 26 other national authorities, the report said. Before the draft decision can be finalized, it must effectively be agreed by other E.U. privacy regulators, a process that could take months and lead to substantive changes, including a higher or lower fine.

In the U.S., House lawmakers determined in an October report last year that Amazon’s activities were anticompetitive, largely related to the usage of third-party sellers’ data. The Federal Trade Commission (FTC) is currently probing antitrust concerns involving Amazon, and California and Washington state have separately launched antitrust probes.

Washington D.C.’s Attorney General Karl A. Racine has taken the strongest step in the U.S., filing an antitrust lawsuit against the e-commerce giant, accusing the company of stifling competition through agreements with sellers on its platform, artificially raising prices for consumers and depriving consumers of choice.

Similar to the potential CMA investigation, Racine’s suit saw the Buy Box as a major point of contention. He alleged that while Amazon’s “Fair Pricing Policy” allows sellers to set their own prices, it also allows the e-commerce company to respond by removing the seller’s listing from the Buy Box, particularly if the merchant offers a better deal on the product elsewhere.

The European Commission first opened a formal antitrust investigation into Amazon in 2019. In November last year, the Commission opened a second investigation into the company’s business practices and officially filed antitrust charges for using third-party seller data to inform its strategic business decisions, like reducing product prices.

It is possible that the E.U. probes may not have a leg to stand on, the Financial Times reported in March. FT said that regulators in Brussels were struggling to gather sufficient evidence to file antitrust charges against the tech titan. In their case, which focuses on the way Amazon’s algorithm allegedly favors its own products over rivals, antitrust enforcers are reportedly having difficulty understanding how the company’s algorithms functioned.

Officials were likely not able to access Amazon’s proprietary code due to legal issues surrounding trade secrets, FT reported.

And after a scathing Reuters report in February detailed internal documents from Amazon’s India operation suggesting the company was giving preferential treatment to certain sellers, among other methods that skirted national e-commerce regulations, The Competition Commission of India (CCI) reopened a probe into the online giant.

Amazon, HanesBrands link up for counterfeit lawsuit

While Amazon is playing defense at nearly every turn these days, the company also is teaming up with HanesBrands to file 13 lawsuits against 17 defendants for selling protective earbud case covers that bear HanesBrands’ registered Champion trademark.

The companies allege that the defendants attempted to offer the infringing products in Amazon’s store, thus violating Amazon’s policies and infringing on HanesBrands’ registered Champion trademarks.

The lawsuits were filed in the U.S. District Court for the Western District of Washington. They allege that the defendants used HanesBrands’ registered Champion trademarks without authorization to deceive customers about the authenticity and origin of the products and to create a false affiliation with HanesBrands. Amazon closed the defendants’ selling accounts.

“The vast majority of Amazon customers shop with the confidence knowing they will receive an authentic product,” said Dharmesh Mehta, vice president of customer trust and partner support at Amazon. “In the rare instances when bad actors attempt to take advantage of customers and companies like HanesBrands, our team is relentless about tracking down and holding them accountable.”

HanesBrands already won a Champion-related infringement case in China in January, in which the innerwear company filed suit against six Chinese brands for producing and distributing counterfeit Champion products and operating unauthorized Champion retail outlets.

“We will aggressively defend our brands and our intellectual property around the world,” said Jon Ram, president of global activewear at HanesBrands. “We look forward to prevailing in these lawsuits.”

Throughout its runaway growth, Amazon has been plagued by rampant counterfeiting. The company has taken criticism for years from those who argue it hasn’t done enough to curb the problem, and has even seen high-profile brands like Nike and Birkenstock abandon their direct selling relationships with the platform due to the counterfeiting concerns.

But ever since launching its machine learning-based Project Zero initiative in 2019, the online giant has sought to prove doubters wrong, investing more than $500 million into anti-counterfeiting and brand protection measures that year alone. In 2020, Amazon upped the ante by investing more than $700 million in fraud protection efforts, including employing more than 10,000 people tasked with stopping the abuse.

Alongside the investments, Amazon launched its Counterfeit Crimes Unit to begin working closer with law enforcement to report bad actors, and its augmented seller 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.

Amazon has filed a series of lawsuits against counterfeiters, including a suit against individuals using social media to promote and facilitate the sale of counterfeits, as well as joint lawsuits with Italian luxury brands Valentino and Ferragamo, cosmetics brand KF Beauty, family travel accessory brand JL Childress, cooler manufacturer Yeti, and card game company Dutch Blitz.