SHOP SAFE Act of 2020 Targets Counterfeit Ecommerce Products


With U.S. Rep. Doug Collins, R-GA raising the alarm that customers’ “lives are at risk” due to harmful fake ecommerce items, a bipartisan group proposed the SHOP SAFE Act to split down on ecommerce phonies.

” Consumers ought to have the ability to trust that what they buy and see online is what they will get, however counterfeiters continue to sign up with platforms with ease and masquerade as dependable sellers in order to infect American homes with hazardous and unsafe counterfeit items,” Rep. Jerry Nadler, D-NY, chairman of your home Judiciary Committee, stated in a Judiciary release. Numerous counterfeits do not undergo safety screening and present a significant health and safety risk for consumers, the committee noted, noting cosmetics, child formula, batteries, chargers, air bags and safety seat among the possibly dangerous counterfeits sold online. The Government Accountability Office found that 20 of 47 products bought from third-party sellers on popular customer sites were fake.

In an explainer outlining the requirement for the SHOP SAFE act, the Judiciary Committee stated:

  • Establishes trademark liability for online market platforms when a third-party offers a fake product that presents a risk to customer health or security and that platform does not follow specific finest practices;
  • Incentivizes online platforms to develop finest practices such as vetting sellers to ensure their legitimacy, getting rid of counterfeit listings, and getting rid of sellers who consistently offer counterfeits; and
  • Require online markets to take steps needed to avoid the continued sale of counterfeits by the third-party seller or face contributory liability for their actions.

“Counterfeit items straight impact brands and consumers while also positioning serious threats to public health and safety. It is critically crucial that we fight the sale of these harmful products online,” stated Rep. Martha Roby, R-AL and ranking member of the Subcommittee on Courts, Intellectual Property and the Internet. She joined Collins and Nadler in presenting SHOP SAFE, along with Rep. Hank Johnson, D-GA, who chairs the Subcommittee on Courts, Intellectual Property and the Internet.

The proposed legislation comes a little over a month after a Jan. 24 Department of Homeland Security report revealing a crackdown on fake ecommerce products. That came in reaction to an April 2019 memorandum from President Trump on combating trafficking in a rogue economy that was valued at $509 billion in 2016.

SHOP SAFE stands for Stopping Harmful Offers on Platforms by Screening Against Fakes in Ecommerce. Amongst its essential provisions:

Amazon informed CNBC in a statement that it restricts counterfeit goods, and eBay said counterfeits are not welcome. “We are reviewing the legislation and will continue to work with the Committee on this essential issue,” eBay stated.

  • More Americans are shopping online, with ecommerce sales anticipated to reach almost 15% of overall retail costs and more than $4 trillion in 2020
  • Counterfeiters regularly take benefit of the functions of online platforms to look like legitimate sellers. They might use incorrect and unvetted qualifications and make their counterfeit listings appear as genuine as possible to buyers, often by raising phrasing and images from the genuine brand owner.
  • Therefore, it’s surprisingly easy for customers to be deceived into buying fakes online. Some reports approximate that about 25% of U.S. customers have unknowingly acquired a counterfeit great online
  • Most unpleasant, counterfeiters can get away the strict health and safety standards and policies authentic products need to comply with, positioning substantial risks to Americans’ health and wellness:
    • A CNN investigation discovered that a counterfeit children’s automobile seat purchased on an ecommerce platform broke into pieces in a 30-mph crash test, with the toddler-sized dummy twisting as the cars and truck seat fractured, failing federal regulatory requirements.
    • One company’s investigation of counterfeit cellular phone adapters discovered several that were built so inadequately that they had the capability for deadly electrocution.
  • Brand owners presently have a limited set of options to police counterfeit versions of their goods, which are often resource inefficient and extensive at scale.
  • Untraceable sellers with fake aliases leave brand owners with little recourse versus the third-party seller through the U.S. court system. Under existing law, it’s almost difficult to hold online platforms liable when a seller vanishes or can not lie.

According to the January DHS report, seizures of fake and counterfeit goods by CBP and U.S. Immigration and Customs Enforcement (ICE) increased from 6,500 to 33,810 in between 2003 and 2018. During that period, the domestic value of taken merchandise in terms of MSRP increased from $94 million to $1.4 billion, the report stated.

Numerous fakes do not go through security screening and position a significant health and security risk for customers, the committee noted, listing cosmetics, infant formula, batteries, chargers, air bags and cars and truck seats amongst the possibly lethal counterfeits offered online. Counterfeiters often take benefit of the functions of online platforms to appear as genuine sellers. Hence, it’s surprisingly easy for consumers to be misguided into buying counterfeits online.”Counterfeit items directly affect brands and customers while also posturing major risks to public health and safety. According to the January DHS report, seizures of counterfeit and phony items by CBP and U.S. Immigration and Customs Enforcement (ICE) increased from 6,500 to 33,810 in between 2003 and 2018.

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