Amazon’s Foreign Domains Cited by U.S. as Helping Counterfeiters

(Bloomberg) -- The U.S. identified five of Amazon.com Inc.’s foreign domains as notorious markets and will seek more information on them.

The Office of the U.S. Trade Representative listed Amazon’s platforms in Canada, Germany, France, India and the U.K., it said in an annual report to Congress Wednesday. This year’s report focuses on the nexus between online piracy and malware and for the first time lists a U.S.-headquartered company’s foreign domains.

According to USTR, an estimated 2.5% -- or almost $500 billion -- of imports worldwide are counterfeit and pirated products.

U.S. rights holders expressed concerns that Amazon uses misleading seller information because the company does not sufficiently vet sellers on its platforms, a senior USTR official told reporters Wednesday. Another concern is that the counterfeit removal process can be lengthy and burdensome, the report stated.

‘Political Act’

Amazon responded in a statement Wednesday, saying it disagrees with its inclusion on the list and called the action politically motivated.

The Seattle-based company said it “strictly prohibits counterfeit products” and that 99% of pages viewed worldwide by customers on Amazon have never had a report of counterfeit.

“This purely political act is another example of the Administration’s notorious pattern of using the U.S. government to advance a personal vendetta against Amazon,” the statement reads.

In its comments on the report last year, the American Apparel and Footwear Association recommended listing Amazon and encouraged USTR to consider expanding the notorious markets-identification process to include U.S.-based online and physical markets.

“It is essential that both domestic and worldwide marketplaces, and the countries that house them, implement effective and proactive measures to safeguard intellectual property to protect consumers, workers, and their families,” AAFA President and CEO Steve Lamar said in a statement Wednesday. “This is especially the case during the Covid-19 crisis, when more Americans than ever have made online purchases, which can unknowingly expose them to counterfeits sold on unsafe marketplaces.”

De Minimis

While USTR said it was encouraged by changes China is making to its intellectual property-rights regime -- including under the first phase of a trade deal the nations signed in January -- India remains one of the most challenging countries when it comes to IP enforcement, the official said.

The Trump administration also continues to assess potential actions to enforce the so-called import value de minimis threshold of $800, which allows goods below that amount to enter the U.S. without duties. The administration and some U.S. stakeholders allege that e-commerce platforms are exploiting this threshold as a loophole to get around tariffs President Donald Trump has imposed.

Changing the de minimis threshold would require congressional action, the USTR official said, and the administration is therefore discussing steps of what could be done to apply the level without having to change the law.

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