Shop Safe Act Could Hold Amazon Liable for Selling Fake Products

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Right now, when shopping on one of the many of the online marketplaces like Amazon or Walmart, products that look legit sometimes end up being fakes. A new bipartisan bill could help prevent this from happening by making marketplaces liable for bogus goods.


Co-sponsored by four members of the House, the Shop Safe Act of 2020 was created to help protect consumers by making online shopping hubs accountable for selling counterfeit goods. The problem right now is that unless you know the ins and outs of how sites like Amazon really work, it’s unclear who you’re really dealing with and what you might actually be buying.

That’s because mixed in with all the products sold by Amazon, Walmart or others are product listings posted by third-party sellers that look almost identical to those posted by Amazon or Walmart themselves. Often, the best way to tell who is really responsible for shipping and selling a product is to look at the “by” or “fulfilled by” tag to see if an item is coming directly from an online retailer, or somewhere else.

The issue gets compounded because frequently, third-party sellers don’t have the same standards or reliability as big-name e-tailers, which means people end up with incorrect or fake goods and very little recourse for addressing the situation.

After launching its own online marketplace back in 2011, Best Buy shut down its U.S. online marketplace just five years later in 2016 (though the marketplace still operates in Canada) due to confused and frustrated customers who weren’t allowed to return products sold by third-party marketplaces vendors to Best Buy stores.

With the Shop Safe Act, lawmakers are hoping to achieve three major goals:

  • Establish trademark liability for retailers that sell counterfeit goods, regardless of who listed the product.
  • Improve standards for marketplaces to better vet sellers and remove ones that repeatedly ply counterfeit products
  • Prevent marketplaces from being able to profit off of fake products sold by third-party sellers by holding marketplaces liable for the actions of its sellers.

In a press release issued by the House, New York congressmen and co-sponsor of the bill Rep. Jerrold Nadler says:

“American consumers increasingly turn to the internet to shop. Counterfeiters have followed consumers, and it is clear more must be done to combat the rising trend in online sales of counterfeit products. Consumers should be able to trust that what they see and purchase online is what they will get, but counterfeiters continue to join platforms with ease and masquerade as reliable sellers in order to infect American households with dangerous and unsafe counterfeit products. The SHOP SAFE Act proposes a set of commonsense measures to tackle the gaps in these platforms’ systems and stop counterfeit sales.”


For anyone who has been burned when buying something online only to receive fake goods in the mail, the Shop Safe Act definitely seems like a step in the right direction. And with two Democrats and two Republican representatives sponsoring the bill, it seems protecting Americans from buying counterfeit products is one of the few things both parties can agree on.

[Update 3:30PM] After publishing our story, an Amazon spokesperson contacted us with an official comment regarding fake products being sold on its marketplace. Amazon says

“Amazon strictly prohibits counterfeit. In 2018 alone, Amazon invested more than $400M to fight fraud, counterfeit, and other forms of abuse. In 2019, we launched new programs including Project Zero and IP Accelerator, expanded existing programs like Brand Registry and Transparency, and piloted new innovations including the Utility Patent Neutral Evaluation process. Just last month, we committed to reporting all confirmed counterfeiters to law enforcement to help them build stronger criminal cases that can hold counterfeiters accountable. We are actively fighting bad actors and protecting our store and we will continue to work with brands, government officials, and law enforcement.” 




I’m for this, although Amazon already has a guarantee in place if your product doesn’t arrive* (or doesn’t arrive as the product you were promised). It’ll probably have a bigger effect on Newegg and eBay (my guess is that the marketplaces will start requiring sellers to put down a deposit or get insurance before selling through their sites if the law passed).

* I had to use it a year ago when a seller disappeared with the money I’d paid for a shirt.