Amazon, eBay grilled over online counterfeits

Lawmakers grilled some of the country’s top e-commerce platforms about their efforts to combat the spread of online counterfeits on Wednesday as the Trump administration and Congress push to clamp down on the hundreds of millions of fake products spreading across dominant and powerful platforms.

Executives with eBay and Amazon, two of the top U.S. e-commerce players, testified before the House Energy and Commerce Subcommittee on Consumer Protection and Commerce about how they’re working to sweep up fake and potentially dangerous products before they’re sold to their millions of customers. The company representatives emphasized they are willing to work with the government as they step up their various internal efforts.

But a bipartisan group of lawmakers questioned whether the platforms are benefiting from legal loopholes and skirting liability as their customers are duped and injured by fake iPhone chargers, children’s products and electronics.


Why lawmakers are worried: “The emergence of these unregulated platforms has given criminal enterprises additional means to sell stolen and counterfeit goods to unsuspecting consumers,” said Rep. Jan Schakowsky (D-Ill.), the subcommittee chair.

Over the past year, the issue of online counterfeits has jumped into the spotlight as the Trump administration battles with Beijing over the influx of fake products from China. The majority of fake and imitation products seized by U.S. Customs and Border Protection over the past two decades arrived from China and Hong Kong, according to U.S. government data, and the latest trade agreement with China requires Beijing to take stronger action against counterfeit goods.

“The president has made this a priority,” said Rep. Cathy McMorris-Rodgers (R-Wash.), the top Republican on the subcommittee, “which is clear in ‘Phase 1’ of the U.S.-China Trade deal.”

House Energy and Commerce Committee Chairman Frank Pallone Jr. (D-N.J.) quickly took issue with McMorris-Rodgers’s suggestion, saying before his opening remarks, “You said the Trump administration’s leading on this issue — I don’t think they are.”

White House trade adviser Peter Navarro in particular has led the administration’s efforts on the issue. He recently pressed a key group of House Judiciary Committee members to subpoena Amazon CEO Jeff Bezos, claiming that Bezos has refused to sit down with the Trump administration about the issue.

Overall, Democrats and Republicans on the committee voiced concerns that tracked with recent statements from Navarro and acting Homeland Security Secretary Chad Wolf. Navarro and Wolf say the top platforms need to assume more responsibility over online counterfeits, which have surged as e-commerce becomes more ubiquitous.

“The success and benefits of these platforms have given rise to those peddling counterfeit and illicit products for a quick buck,” said Rep. Greg Walden (R-Ore.), the ranking member of the full committee.


What the execs said: Amazon’s vice president for customer trust and partner support, Dharmesh Mehta, and eBay associate general counsel Amber Leavitt testified that their companies are building up internal defenses against counterfeits, including powerful artificial intelligence systems that pull down products before they’re even reported.