On May 10, 2021, Amazon released its 2020 Brand Protection Report (the Report), the first of its kind published by the e-commerce giant. The Report offers insight into Amazon’s brand protection approach and efforts over the past year, including proactive controls, brand tools, and consequences for “bad actors”. With a growing number of fraudsters cropping up online to take advantage of the pandemic’s e-commerce boom, Amazon’s work to protect sellers and customers is becoming increasingly important. Below, we set out some of the Report’s key highlights for brand owners.
In 2020, Amazon:
- Invested more than $700 million, and employed more than 10,000 people, to combat fraud and abuse.
- Prevented over 6 million attempts to create new seller accounts (up from 2.5 million attempts in 2019).
- Amazon’s multi-layered seller verification processes now include live video chats to verify sellers’ identities and government-issued documentation, as well as physical address checks.
- Only 6% of attempted new seller account registrations passed Amazon’s verification processes and were able to list products for sale.
- Blocked more than 10 billion suspected bad listings before they were published.
- Scanned more than 5 billion attempted changes to product detail pages daily for signs of potential abuse.
- Seized and destroyed more than 2 million counterfeit products sent to its fulfillment centers.
- Less than 0.01% of all products sold on Amazon received a counterfeit complaint from customers.
Amazon’s Initiatives and Programs
The Report also offers data and insights relating to both new and established Amazon initiatives and programs:
- Amazon Counterfeit Crimes Unit. Established in 2020, this unit: (i) builds and refers cases to law enforcement; (ii) undertakes independent investigations, or joint investigations with brands; and (iii) pursues civil litigation against counterfeiters.
- Displaying U.S. seller information. A sellers’ business names and addresses are now displayed on their Amazon seller profile pages. This was already a requirement for stores in Europe, Japan, and Mexico. Amazon pledged to globally extend this policy in 2021.
- Payment Service Provider Program. Launched in February 2021, the program enhances Amazon’s ability to detect, prevent, and take action against bad actors by allowing Amazon to better identify the bank accounts to which sellers direct their payments, and the people ultimately receiving those payments.
- Amazon Brand Registry. Launched in 2017, Amazon’s Brand Registry is a free service which provides its members with tools to manage and protect their brand and intellectual property (IP) rights on the Amazon platform. In 2020, more than 500,000 brands were enrolled in the Registry. Brands are said to have reported, on average, 99% fewer suspected infringements than before the Registry’s launch.
- Transparency. Transparency is a product serialization service that allows brands to individually identify and protect product units through the application of unique codes, either on the product or its packaging. Amazon scans the codes before the products ship out in order to verify their authenticity. Customers using Amazon’s mobile app can perform a similar scan at home. In 2020, the service was extended to Japan and Australia and more than 15,000 brands are now using Transparency, covering more than 500 million product units.
- Project Zero. Project Zero continuously scans Amazon’s store and automatically and proactively removes potentially infringing listings. Enrolled brands also have access to a self-service tool, which allows companies to independently remove counterfeit listings. In 2020, more than 18,000 brands were enrolled in the project. For every listing removed by a brand through the self-service tool, Amazon’s automated protections removed more than 600 listings.
- Amazon Utility Patent Neutral Evaluation Process. This process brings in neutral third-party evaluators with expertise in technology and patent law to determine if they believe a product is infringing. Utility patent disputes handled through the process were decided in an average of seven (7) weeks, which is significantly faster than the average time required to take a patent lawsuit through to trial.
- IP Accelerator. Amazon’s IP Accelerator is a program designed to help small to medium-sized enterprises (SMEs) streamline the process of protecting their brands in Amazon’s digital store space. The IP Accelerator provides free access to a vetted network of IP law firms offering preferential rates for trademark prosecution work. SMEs using the IP Accelerator also get fast-tracked access to Amazon’s brand protection offerings as soon as their trademarks are filed, rather than waiting for the marks’ successful registration. In 2020, the IP Accelerator expanded to France, Germany, India, Italy, Japan, the Netherlands, and the United Kingdom. Additionally, the IP Accelerator connected more than 7,000 SMEs to law firms in the United States and Europe who then went on to successfully submit trademark applications.
- Reporting counterfeiters. In 2020, Amazon began reporting all confirmed counterfeiters to law enforcement agencies in Canada, China, the European Union, the United Kingdom, and the United States.
- Destroying counterfeits. Where counterfeit products are sent to Amazon’s fulfilment centers, Amazon separates that infringing inventory and destroys those products so that they cannot be resold elsewhere.
- Operation Fulfilled Action and IPR Center pilot project. The joint operation, launched in November 2020 by Amazon’s Counterfeit Crimes Unit and the National Intellectual Property Rights Coordinator Center (IPR Center), sought to prevent counterfeits from entering the U.S., focusing on ports of entry. Amazon also participated in the IPR Center’s pilot to develop a private information exchange to enable industry participants (e., stores, payment service providers, banks, and shipping companies) to better identify and stop counterfeit goods before they reach consumers.
It is encouraging to see that one of the world’s dominant online marketplaces is taking proactive steps to prevent counterfeiting and offering other programs that try to address some of the challenges in managing brands online.