201810.19

2018 Special 301 Out-of-Cycle Review of Notorious Markets: the AAFA Nominates Three Amazons Platforms

Every year, the Office of the United States Trade Representative (USTR) collects a list of the most notorious online and physical counterfeit spots that are outside US borders. (Special 301 Out-of-Cycle Review of Notorious Markets). For example, the 2017 report mentions, inter alia, the following marketplaces: DHGhate.com (China), Indiamart.com (India), Taobao.com (China), Vkontakte.com (Russia), and the shopping mall called “Pacific Mall” in Markham, Ontario, Canada (iptwins.com, 1st Oct. 2018). As part of the 2018  Comment Request from the USTR, the American Apparel & Footwear Association (AAFA) shared its experience in a letter to the USTR on October 1, 2018.
AAFA is “the national trade association representing apparel, footwear, travel goods, and other sewn products companies, and their suppliers, which compete in the global market. Representing more than 1,000 world famous name brands” (see AAFA’s letter to the USTR dated October 1st, 2018, p.1).
AFAA focuses particularly but not exclusively on Amazon, since the giant from Seattle occupies a dominant position in the sphere of global electronic commerce. That said, the Special 301 Out-of-Cycle Review of Notorious Markets does not concern US marketplaces. Accordingly, there will be no mention of eBay (although the US authorities regularly perform actions on counterfeit cases in relation with sales on eBay: iptwins.com, June 25, 2018; iptwins.com, August 27, 2018), SunFrog.com (the platform was recently condemned to nearly $ 20 million for counterfeiting: iptwins.com, June 27, 2018), or even Amazon.com.
As a result, AFAA centers the grievances on amazon.co.uk (United Kingdom), amazon.ca (Canada) and amazon.de (Germany). However, everyone understands that it is Amazon’s cooperation policy against counterfeiting that is concerned. In general, AAFA observes and regrets the proliferation of third-party sellers, which is nourished by a business model that “limits the ability of both brands and consumers to verify the authenticity of goods.” (AAFA’s letter to the USTR dated October 1st, 2018, p. 2). It is in a spirit of constructive cooperation that AFAA makes its grievances known to Amazon and the public.
These grievances, of course, focus on the supply of counterfeits, but also on certain aspects of Amazon’s business model. For instance, the AFAA challenges the “By Brand” lists of products:

Screenshot: “Best Brands” page on Amazon.ca

‘By [Brand]’: Amazon’s use of a brand’s trademarks ‘by [brand]’ in product listings is a source of frustration for members and a source of confusion for consumers. For brands, especially those brands that do not sell directly on Amazon, having products listed as ‘by [brand]’ is at best unauthorized and at worst counterfeit. Moreover, this is confusing for consumers shopping on Amazon, who may believe they are receiving product from the authentic brand or an authorized third-party seller—especially as these listings often include a copyrighted image from a legitimate website.” (AAFA’s letter to the USTR dated October 1st, 2018, p. 3).
Besides, the AFAA reports:
  • approximate management of ASINs (Amazon Standard Identification Numbers), which would serve the interests of counterfeiters;
  • unauthorized use of copyrighted images, particularly on Amazon.co.uk where requests for removal from copyright holders would almost systematically be rejected; and
  • with respect to Amazon’s brand protection program, AFAA members acknowledge improvements, but these advances are still insufficient.
In addition to Amazon, AAFA would like bukalapak.com, udaan.com, macyskorea.co.kr and certain Shopee platforms (shopee.com.my, shopee.ph, shopee.co.th and shopee.co.id) to be displayed on the Special 301 Out-of-Cycle Review of Notorious Markets. AFAA generally admonishes these marketplaces because of lack or poor cooperation in the battle against counterfeiting.
As to non-digital marketplaces, AFAA provides a selection of approximately 130 market locations, most of which are located in Asia (16 in China, 28 in India, 21 in Thailand), Latin America (19 in Bolivia), in Russia (9) or in Turkey (9). In the European Union, three Spanish markets are mentioned.

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