Deterrents Not Thwarting Online Counterfeits: Amazon

Amazon supports “expanded government authority” for federal agencies to share “pre-seizure enforcement information with the private sector” to help reverse the explosive growth in e-commerce trafficking of counterfeit goods, Christa Brzozowski, senior manager-public policy, told a Center for Data Innovation webinar Thursday. She’s a former Department of Homeland Security senior official for trade and security policy before joining Amazon last year.

Brzozowski worries that “current legal frameworks” impede the public-private sharing of enforcement information, and “might complicate” the work of “the customs folks at the border,” she said. Amazon is “closely aligned” with industry and government “best practices” that call not only for removing “bad actors” from the Amazon marketplace, but also “that they’re held accountable,” she said. “You remove the product for sale, of course, but you also take the additional steps of investigating related accounts,” even destroying “inauthentic inventory, so you’re not seeing those same inauthentic goods reentering the supply chain somewhere else,” she said.

Amazon backs creating teams and capabilities “to partner with brands, and to partner with law enforcement, to hold these guys accountable,” by pursuing civil litigation and criminal prosecution, “so you actually improve the deterrent effect,” said Brzozowski. Deterrents against the online trafficking of counterfeit goods are “just not strong enough right now to be preventing, in any meaningful way, this type of activity,” she said.

AI and machine learning can play a big role in being “proactive offstream” to prevent the spread of counterfeit goods on Amazon “before it impacts our customers or one of our selling partners,” said Brzozowski. “We take this super-seriously.” Amazon wants to stop bad actors “across this space, not just in our store,” she said.

The ability to collect information and the “capacity to draw conclusions” from the data is critically important to that goal, said Brzozowski. “We need to be able to identify the trends, uncover connections, connect the dots” in a way that’s “foundational” to thwarting counterfeits and “broader criminal activity,” she said. AI can help Amazon “keep step with today’s counterfeiters, who are global themselves, who are operating across the space, across jurisdictions, across borders, across different modes of transport,” she said.

Amazon has a global team of 8,000 data scientists, analysts and engineers “focused on building tools and building capacity to do this sort of preventative work,” said Brzozowski. “One of the benefits of AI and machine learning is that the data, the lessons that we learn, can be plowed back in and make the targeting systems even smarter and more effective,” especially since Amazon typically gets inundated with a million “pieces of customer feedback a week,” she said.

A “top priority” at Walmart is backing congressional legislation that would bolster “verification of third-party sellers” on e-commerce platforms, said Sara Decker, senior director-government affairs. Walmart also supports measures like the Inform Consumers Act (S-936) now before the Senate Commerce Committee that would force “disclosures to the customer when they are dealing with a third-party seller,” she said. “It’s something we strongly support as a way to build trust within the ecosystem and establish best practices across the board.”

Walmart has a “business motivation to really address this issue” of online trafficking in counterfeit goods, said Decker. Walmart built its e-commerce business model “around a curated marketplace, to verify our sellers where they have access to that marketplace,” she said. “That has allowed us to keep our prevalence of counterfeits down to 0.01%, which we think is a great statistic.” Walmart would “obviously love to get that to zero, but it is a complex issue with a complex supply chain,” she said.

Even if Walmart were to successfully identify bad actors on its own marketplace and “terminate them” from selling there, “we’re not the only marketplace out there,” said Decker. Criminals are “iterative” in the channels they use “to get their fake products out into the supply chain,” she said. “We have a long ongoing relationship with law enforcement via our global investigations team. We want to be a partner to get these bad actors out.”