Amazon invests hundreds of millions in brand protection

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Amazon has scaled up its investments in brand protection in 2021 – and removed around 3 million counterfeit products from circulation. This and many further details have now been published in the internet giant’s new annual report.

E-commerce giant Amazon has published the second edition of its annual Brand Protection Report, providing detailed insights into its brand protection activities in 2021. Last year alone, as Amazon says, it has invested more than 900 million US dollars (around 877 million euros) – and apparently now employs more than 12,000 people to combat counterfeiting. Compared to the previous year’s report, the company’s spending has increased significantly – for 2020, Amazon said it invested more than 700 million US dollars (around 688 million euros) to combat counterfeiting, fraud, and abuse on its platform.

In total, more than 3 million counterfeits were taken out of circulation in 2021, according to Amazon. This includes products that had been sent to the company’s logistics centers under the Fulfillment by Amazon (FBA) program; and also products that had been stashed in warehouses and premises of counterfeiters and that had been seized, for example, during law enforcement raids in which Amazon cooperated with brands and authorities.

The company also said it had stopped more than 2.5 million attempts to create fraudulent selling accounts. Amazon puts the fact that these are around 60% fewer cases than in 2020 down to an improved verification process. According to the company, this has deterred fraudulent vendors already from wanting to create new accounts in the first place. The key factor here is a new requirement for merchants to undergo personal verification.

// 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.
Dharmesh Mehta, Vice President, Selling Partner Services

Amazon also points to its programs to work with businesses. For example, around 700,000 brands have reportedly now joined the brand protection program Brand Registry, an increase of around 40%  compared to the previous year. In contrast, the number of notices of infringements has fallen by around 25% – a development that the company puts down to its automated brand protection measures.

In contrast, the number of lawsuits and criminal proceedings triggered by Amazon’s Counterfeit Crimes Unit (CCU), which was founded in 2020, increased sharply by around 300%. In the EU, the US, the UK, and China, the company’s experts have sued or referred around 600 suspected fraudsters to authorities. Just recently, for example, Amazon, together with Swiss luxury goods manufacturer Cartier, filed suit in a U.S. court against a total of nine defendants allegedly involved in counterfeiting trade; among the defendants is apparently one influencer. He is accused of directing potential buyers of counterfeits to an Amazon store where the products were allegedly offered without obvious signs of trademark infringements.

In addition to reactive measures, Amazon is also taking a proactive approach to counterfeiting with its Project Zero program, which had previously also triggered widespread criticism. Project Zero uses machine learning and automated processes to identify and remove fraudulent offers, according to Amazon. “Among brands in Project Zero, for every one listing removed by a brand, Amazon’s automated protections proactively removed more than 1,000 suspected infringements,” the report says.

Despite ongoing criticism of Amazon, the company’s measures evidently also show effects: For example, the company’s European platforms were recently removed from the U.S. government’s Notorious Markets list. However, the U.S. company itself also feels there is a need for further action: “While we are proud of the progress we have made, we will not stop until we drive counterfeits to zero in our store”, says Mehta.

Sources: Amazon, WTR

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