The U.S. Trade Representative’s 2019 blacklist of intellectual property abusers might include a striking new name: the $1 trillion e-commerce goliath that is Amazon. According to the Wall Street Journal, the Trump administration is considering adding some of the foreign offshoots of Jeff Bezos’ e-commerce empire to the USTR’s Special 301 Out-of-Cycle Review of Notorious Markets, an annual report that identifies “specific physical markets” to digital ones across the globe that are “reported to be engaging in and facilitating substantial copyright piracy and trademark counterfeiting.”
Since the USTR began publishing the “Notorious Markets” list in 2006, it has focused exclusively on non-native entities that are said to be most egregiously abusing the intellectual property rights of United States-based companies on a worldwide basis, such as alleged counterfeit haven Alibaba-owned TaoBao and infringing video streaming sites likes Pirate Bay and Putlocker, in an effort to encourage them – and relevant authorities and lawmakers – “to combat piracy and counterfeiting.”
While inclusion on the list is technically the equivalent of “public shaming,” as the Wall Street Journal put it, in that such a name-check by the USTR does not carry with it any direct sanctions, inclusion can be “a public-relations problem for companies on the list,” nonetheless, and “bring significant pressure to Washington’s international negotiations and interactions with them and their home countries.”
As for the potential inclusion of some of the international arms of Seattle-based Amazon, that would be a “watershed event,” according to the WSJ, largely because of the company’s American heritage.
At the front of the public push to include Amazon on the USTR’s list is a prominent retail trade group, which has called on the government entity to take action. In response to the USTR’s solicitation for comments “concerning examples of online and physical markets based outside the United States that reportedly engage in and facilitate substantial copyright piracy or trademark counterfeiting,” the Washington, DC-based American Apparel and Footwear Association (“AAFA”) included foreign domains owned and operated by Amazon, in its submission for the 2019 “Notorious Markets” review.
According to an October 1 release from the AAFA, the group – which boasts members, such as Calvin Klein, Canada Goose, Jimmy Choo, Marc Jacobs, Stuart Weitzman and Ralph Lauren, among others – says that it “identified 130 physical marketplaces and eight online marketplaces that member companies identified as engaging in and facilitating substantial trademark counterfeiting and copyright piracy.”
With regards to specific online marketplaces, the AAFA “highlighted amazon.co.uk (United Kingdom), amazon.ca (Canada), and amazon.de (Germany), amazon.fr (France) and amazon.in (India),” asserting that “despite its role as a leader in the worldwide retail landscape, and as an important selling partner for many of our member brands, Amazon continues to present significant counterfeit challenges.”
“While we are happy to have seen increased engagement with Amazon on brand protection issues during the past year,” the AAFA further asserted in its release, it noted that such “engagement regrettably has not translated into a discernible decrease in counterfeits of our members’ products on Amazon’s marketplaces.”
In addition to calling on the USTR to include Amazon-owned platforms on its 2019 list, it has “encouraged” the government entity to expand future reports to include domestic marketplaces, which would enable to group to call specific attention to Amazon’s domestic site, as well.
This is not the first time that Amazon has been cited as a potential point of inclusion for the USTR’s annual list. Last year, in light of near-incessant reports of counterfeit goods saturating its global platforms, the AAFA similarly asserted that Amazon is not consistently doing enough to fight fakes, and thus, should be included on the government’s annual list of bad actors, particularly as the AAFA’s “members are growing increasingly frustrated with how [Amazon] protects their intellectual property.”
Despite the AAFA’s proposal last year, Amazon’s international sites never made it onto the USTR’s list.
Responding to the AAFA’s 2019 push for Amazon’s inclusion, Brian Huseman, Amazon’s Vice President of Public Policy, sent a 4-page letter to the USTR on October 15, in which he details Amazon’s approach to counterfeiting (“In 2018 alone, we invested over $400 million in personnel and employed over 5,000 employees to fight fraud and abuse (including counterfeiting) in our stores.”) and the risk the company runs if counterfeits are not kept at bay (“We view counterfeiting as an existential threat: if customers do not trust what they purchase through Amazon’s stores, they can and will shop elsewhere.”).
Shifting the blame back to the AAFA, Huseman states in his letter that “despite Amazon’s best efforts to engage with the AAFA collaborate with its members to effectively prevent the sale of counterfeits, many of its member brands have not adopted Amazon’s brand protection tools.” He further asserts that “when brands refuse to use the tools that Amazon makes available to them, offer only anonymous criticism that is directly refuted by available data, or conflate concerns about counterfeits with questions like the ‘unauthorized’ distribution of authentic products, the shared goal of combatting counterfeiting is undermined rather than enhanced.”
In short, Huseman says that the AAFA’s “submission does not reflect the efforts that Amazon has already undertaken on their behalf and does not support Amazon’s inclusion on the 2019 Notorious Markets List.”
The USTR’s report is expected to be released in January.
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