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Project Zero: Amazon's fight against counterfeiters

Posted on 08 April 2019

Project Zero: Amazon's fight against counterfeiters

Not to be confused with the popular survival horror video game of the same name, earlier this year Amazon launched 'Project Zero' in a bid to show the market that it is taking serious measures against counterfeiters. 

This initiative appears to be in response to both: (i) negative press regarding the amount of counterfeit goods that can be purchased on e-commerce platforms and their response time in dealing with such issues when flagged; and (ii) the lack of interest of luxury brands, and their explicit refusal, in having their products listed on Amazon (see the ECJ decision in Coty (discussed in our December 2017 edition) where Coty sought, and the ECJ ruled, that a supplier of luxury goods could prevent its authorised distributors from selling those luxury goods via third-party platforms such as Amazon). It appears that Amazon is trying to appeal to these luxury brands (who are generally the most counterfeited) by promising to deliver on active counterfeit monitoring and empowerment to brand owners. 

Amazon's Project Zero has three prongs of attack:

  1. Automated Protection Measures

Amazon says that its "machine learning expertise" scans listings and proactively removes suspected counterfeits, using data provided by brand owners. 

  1. Self-service by brand owners

Brand owners who sign up to Project Zero will be given administrative privileges on Amazon which will allow them to instantaneously take down listings which they believe to be counterfeit. Whilst Amazon's current take down policy will continue to exist, this effectively shifts the burden from Amazon to the brand owners to monitor listings on Amazon. Whilst this may receive criticism from some, others may see it as a welcome empowerment. 

There is a concern, of course, that this aspect could be open to abuse, so Amazon will need to ensure that it has sufficient checks and balances in place. 

  1. Serialisation of products 

Amazon offers an optional 'pay per product' service (approximately $0.01 - $0.05 per unit based on volume) to scan and confirm the authenticity of a brand's products when they are sold on Amazon. It works by brands putting unique codes on each of their products (akin to a serial number) which can be scanned and verified by Amazon when a purchase is made, and identify any counterfeit products. 

In theory this works, but counterfeiters are smart. Once they catch on to which brands are using serialisation, if it is worth it for them to do so, it is likely that they will include these serial numbers as part of their replica products. As such, the cost of paying Amazon for this service and the cost to the brand of serialising its products may not be worth it. 

Currently, whilst free to join, Project Zero is 'invite only' and there is a waiting list - perhaps to try and entice the more luxury brands to join this 'exclusive club'. 

It is too soon to know whether Project Zero will have any material effect on counterfeiters but, once it is known which brands have signed up to Project Zero, it may act as a deterrent more than anything else to prevent counterfeiters targeting those particular brands on Amazon. 

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