E-commerce sites that offer third-party selling, such as Amazon and eBay, could face bigger fines and additional regulations if tougher sanctions proposed by the White House are adopted by U.S. Customs and Border Protection.
Earlier this week, President Trump signed a memorandum directing CBP, in consultation with the Attorney General, to “consider taking all appropriate action, consistent with applicable law,” by:
- seizing counterfeit goods imported in connection with a transaction on an e-commerce platform and
- imposing the maximum fines and civil penalties allowable on any e-commerce platform that directs, assists with, or is in any way concerned in the importation of counterfeit goods.
The memo also directs the Secretary of Homeland Security and the AG to develop, within 120 days (Feb. 10, 2021), a proposal for legislation that would strengthen the executive branch’s authority and increase its resources to combat the trafficking of counterfeit goods through e-commerce platforms.
“Trafficking in counterfeit goods infringes on the intellectual property rights of American companies, undermines their competitiveness and harms American workers,” the president states in the memo, which notes that “E-commerce platforms serve as key contributors to counterfeit trafficking by acting as intermediaries and providing marketplaces that match up buyers and sellers.”
In April 2019, President Trump issued a memorandum aiming to crack down on the sale of counterfeit goods online. Among other things, the memo called for a new report from the Departments of Homeland Security, Commerce and Justice, determining how widespread the problem is and analyzing how effective current responses are, while recommending potential regulatory or legislative changes to better combat the sale of fake goods.
Last January, U.S. Customs and Border Protection launched a pilot program with nine online marketplaces and shipping services, such as Amazon, Zulily, eBay and FedEx — all of which volunteered for the program — to disclose information on shipments, package contents, manufacturing and recipient details.
Acknowledging the growing nature of the problem, industry leaders such as eBay and Amazon have invested significantly in recent years to develop artificial intelligence and other technology solutions to help detect counterfeit items on their platforms. Amazon’s anti-counterfeit efforts include its “Brand Registry,” which allows companies to report suspected infringement; its Counterfeit Crimes Unit, which works to prevent fraud and investigates reported cases; and a tracing service, which assigns a serial number to each item manufactured.