Bipartisan bill could make online retailers liable for fakes

Lawmakers across the US political divide have drawn up new legislation that could make e-commerce companies like Amazon and eBay liable for counterfeit goods sold via their websites.

The Stopping Harmful Offers on Platforms by Screening Against Fakes in E-Commerce (SHOP SAFE) act – introduced by two Republican and two Democrat representatives – sets out a series of measures that e-commerce platforms must take to prevent the sale of counterfeits by third-party sellers on their platforms.

Under the proposals, companies which fail to take comply with the steps could be held liable for the sale of counterfeits – something which they have so far avoided despite years of litigation.

SHOP SAFE would establish trademark liability for companies who sell counterfeits that pose a risk to consumer health and safety and also require online platforms to establish best practices to vet sellers to ensure their legitimacy.

Other provisions call for prompt removal of counterfeit listings and the banning of third-party sellers who repeatedly sell fake products. Online marketplaces would also have to take steps to prevent the continued sale of counterfeits by a third-party seller or face contributory liability for their actions.

“Consumer lives are at risk because of dangerous counterfeit products that are flooding the online marketplace,” commented Rep Doug Collins (R-Ga), one of the four authors of the bill and Ranking Member of the House Judiciary Committee.

“Congress must create accountability to prevent these hazardous items from infiltrating the homes of millions of Americans,” he added.

The other lawmakers behind SHOP SAFE are Jerrold Nadler (D-NY), Martha Roby (R-Ala), and Hank Johnson (D-Ga).

The new bill has been welcomed by the American Apparel & Footwear Association (AAFA), although the organisation also cautioned there is “continual need for improvement in the fight against counterfeit products on third-party marketplaces”.

The AAFA’s president and chief executive, Steve Lamar, said SHOP SAFE is “the latest in a string of proactive efforts by Congress and the administration to address the growing counterfeit problem.”

It comes after President Trump signed an executive order earlier this year that instructed the Department of Homeland Security (DHS) to implement measures to prevent counterfeit products from overseas from being sold to US citizens via online retail sites.

In January, the DHS published a report detailing a number of recommendations to tackle the trade in counterfeits, including ensuring that entities with financial interests in imported fake goods bear responsibility.

“Unless we are continuously improving in the fight against counterfeits, we are falling behind,” continued Lamar.

“While many online marketplaces are directing increased resources towards this issue, much more needs to be done to prevent counterfeit products from unknowingly entering the homes of American families.”

In 2018, US Customs and Border Protection (CBP) seized $1.4bn in intellectual property-infringing goods, up from $1.2bn in 2017, with the total number of seizures reaching almost 34,000.

Clothing and accessories topped the table, followed by footwear, watches and jewellery, handbags/wallets and consumer electronics.