US Moves To Curb Pirated eCommerce Goods

The U.S. is moving to get tough on the sale of counterfeit merchandise online, notifying eCommerce marketplaces and warehouses that they will get hit with fines if they don’t pull knockoffs out of circulation, The Wall Street Journal reported.

The Department of Homeland Security (DHS) is planning to release a report on Friday (Jan. 24) that summarizes an immediate plan to fight fakes — and calls on eCommerce sellers to assist in the effort.

The drive follows a partial trade agreement with China this month which requires sellers to pull counterfeit goods or risk new tariffs.

The combined effort by U.S. Customs and Border Protection and the White House is turning up the heat on eCommerce giants like Amazon that host third-party goods and services on its platform.

The WSJ reviewed the DHS report that indicates officials will “seek all available statutory authorities to pursue civil fines and other penalties against these entities.” It also calls for new rules “to explicitly permit the government to seek injunctive relief against third-party marketplaces and other intermediaries dealing in counterfeit merchandise.”

“This is not about any one eCommerce platform — this is about eCommerce playing by a different set of rules that simultaneously hammer brick-and-mortar retailers, defraud consumers, punish workers and rip off intellectual-property rights holders,” said White House trade adviser Peter Navarro, who is working on the initiative. “It’s Amazon, Shopify, Alibaba, eBay, JD.com, Walmart.com and a constellation of lesser players that provide the digital hubs.”

The initiative empowers officials to investigate shipments after clearing customs and going to a local warehouse.

The U.S., as well as other countries, points to an increasing issue with knockoffs as consumers search for the lowest prices online. A crackdown last summer discovered that about 5 percent of shipments inspected had counterfeits and almost 14 percent had some type of violations, according to the report.

Illicit and counterfeit goods are a multibillion-dollar business, with sellers losing $323 billion from counterfeit goods in 2017. Online sales of such products are projected to reach $1.8 trillion by 2020.