American Apparel & Footwear association cites counterfeit surge

AAFA submitted comments to the Office of the United States Trade Representative recommending platforms and marketplaces – including Amazon, Facebook, and Instagram – for Notorious Market designations.

WASHINGTON, D.C. – November 09, 2020 – As the number of Americans relying on e-commerce grows in response to the effects of the COVID-19 pandemic, the American Apparel & Footwear Association (AAFA) cited growing concerns with the volume of counterfeits being shipped to the homes of American consumers in its comments for the 2020 Special 301 Out-of-Cycle Review of Notorious Markets. In its submission, AAFA highlighted concerns with the volume of counterfeits and the lack of sufficient brand protection measures on Amazon, Facebook, and Instagram platforms.

The line between e-commerce and social media platforms has blurred in recent years, giving way to the explosion of social commerce. AAFA has recommended the inclusion of Facebook, including its Instagram platform, as part of the Notorious Markets report citing input from the association’s membership and growing research showcasing the prevalence of counterfeits and fraudulent advertising on this platform.

AAFA has also re-nominated Amazon, whose foreign domains were included in the 2019 Notorious Market report. Although AAFA members report increased progress and cooperation with Amazon over the past year, the number of counterfeits on the platform and the systems developed to address them remain mismatched. AAFA plans to accelerate its engagement with Amazon at all levels in an effort to drive better results over the coming year.

“As ecommerce has grown, counterfeits themselves have become notorious for entering Americans’ homes via legitimate marketplaces,” said Steve Lamar, President and CEO of the American Apparel & Footwear Association. “While in the past one would have to proactively enter physical markets with illicit goods, today the counterfeiters are sneaking into mainstream third-party online marketplaces, and even social media platforms, that we have come to trust. The problem is made worse due to insufficient response measures that do not match the growing size of the problem.

“This problem is exacerbated as the nation’s economy continues to struggle due to the ongoing effects of the COVID-19 pandemic. While American businesses and American workers are working hard to survive, counterfeit product sales are stymying the recovery by stealing intellectual property, intercepting sales, and damaging brand reputation. Beyond the damage to American businesses, counterfeits are also putting American consumers at risk, by exposing them to products that may not follow product safety regulations and standards.

“The Notorious Markets report has become an essential tool in the fight against illicit goods, by pressuring companies to significantly improve their mitigation efforts; however, it cannot fix the problem on its own. We need legislation to address the counterfeit problem. Current legislation in Congress proposes to increase requirements to provide consumers with transparency about who they are purchasing from. It is time to take the steps necessary to protect American consumers and American businesses from the many harms of counterfeit sales.”

The Notorious Markets list identifies physical and online marketplaces that purportedly engage in and facilitate substantial copyright piracy and trademark counterfeiting. While the report has historically focused on marketplaces outside of the U.S., the 2019 report cited growing concerns of counterfeit products entering the U.S. through domestic third-party marketplaces. In addition to Facebook, Instagram, and Amazon, AAFA has identified 13 physical marketplaces and 13 online marketplaces for the list. The Notorious Markets report is managed by the Office of the U.S. Trade Representative (USTR).