How Amazon's Counterfeit Products Threaten Safety : Planet Money Over half of sales on Amazon are from third-party sellers, some of whom are selling counterfeit goods. Faulty car seats are threatening children's safety, but is Amazon being held liable?
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How Amazon's Counterfeit Products Threaten Safety

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How Amazon's Counterfeit Products Threaten Safety

How Amazon's Counterfeit Products Threaten Safety

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UNIDENTIFIED PERSON: NPR.

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PAMELA BOYKOFF: Hey, Cardiff.

CARDIFF GARCIA, HOST:

Pamela Boykoff, CNN International woman of mystery, bigwig, et cetera, but more importantly, an excellent journalist who's back with a story.

BOYKOFF: I'm happy to be here. I've got a story I really want to talk to you about. I've been working on it for about six months, and it's about Amazon.

GARCIA: OK. I'm intrigued already.

BOYKOFF: You know, Amazon has been such a constant presence in our lives. Like, everyone's a Prime member. They're also a leader in streaming media, in cloud services, in e-commerce. They control about 38% of U.S. online sales.

GARCIA: Yeah. And so anybody who's familiar with Amazon who uses Amazon will know that a lot of the things that are for sale on amazon.com come from third-party sellers, which can be small businesses, large distributors, even somebody just selling something out of their garage. Last year, Amazon said that 58% of all of its sales came from these third-party sellers. We actually mentioned this in an earlier episode about Nike because it was quitting the Amazon platform because it was tired of counterfeiters. And in fact, today we are focusing on exactly that - counterfeiters.

BOYKOFF: So I have talked to seven different brands that sell children's products on Amazon. They say that counterfeiters are using this third-party marketplace to try and sell counterfeits or patent-infringing copies of their products. And many of these brands, they have safety concerns about those fakes. Remember, these are products for kids. We're talking about things like car seats, baby swaddles and toys. These brands, they're worried a dangerous counterfeit - that could really hurt a child. And they feel like Amazon is putting the onus on them to report suspicious listings. I'm Pamela Boykoff from CNN.

GARCIA: And I'm Cardiff Garcia. Today on THE INDICATOR FROM PLANET MONEY we dive into this world of fake children's products on Amazon and take a look at its potential dangers. We also look at just how the law treats e-commerce sites like Amazon because it differs from the way that the law treats other retailers and it turns out to make a big difference.

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BOYKOFF: After I started digging into this whole counterfeit issue on Amazon, together with some of my colleagues, we wanted to see firsthand what was going on. So, Cardiff, we decided to order a car seat from Amazon. This car seat looks like a copy of the Doona brand.

GARCIA: Yeah. The Doona brand, it's this kind of fancy brand. It's a kind of combination car seat and stroller, and it retails for about $500. A lot of celebrities own them, and it's an attractive target for counterfeiters.

BOYKOFF: The listing on Amazon, it didn't use that brand name Doona, but it showed photos of real Doonas, including one of Ivanka Trump with hers. When the product arrived, it also looked a lot like a Doona, including copying elements of the design the company says it has patented. We showed the seat to this woman, Alisa Baer. She's better known as the Car Seat Lady. She's...

GARCIA: The Car Seat Lady?

BOYKOFF: Yep. She's got quite a following.

GARCIA: OK.

BOYKOFF: She's a pediatrician and car seat safety advocate. All the interviews you'll hear in this podcast are from my piece for CNN.

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ALISA BAER: If you look here, it says, I ways - not always - use seatbelt. If you notice spelling errors in the labeling of the car seat, that should be a red flag. Manufacturers are very diligent about the grammar and the spell-checking of their labeling and instructions.

BOYKOFF: She also noticed some other things that she thought were red flags, like labelling in the wrong language, stitching that went through the webbing of the safety harness, things she said you wouldn't normally see in a car seat.

GARCIA: And, of course, you might think that there's no way to actually tell if a car seat is safe or not unless you, like, crash it really quickly into the wall with your kid in there, and you're not going to do that. Pamela, how'd you get around that?

BOYKOFF: So we crash tested it...

GARCIA: Oh, OK. All right.

BOYKOFF: ...Not with a real kid, of course - with a approved dummy.

GARCIA: I'll take your word for it.

BOYKOFF: We sent the car seat to the University of Michigan Transportation Research Institute. They ran it through a basic 30-mile-an-hour crash test. This is something that all car seats that are sold in the U.S. are supposed to pass, and it failed. There were bits of plastic flying off of it, and the car seat with the toddler inside, it actually slid forward and twisted a bit.

GARCIA: And, Pamela, you said that Baer and another pediatrician looked at this video and said that a child in this seat would have been at serious risk of head and neck injuries - so really scary stuff.

BOYKOFF: For comparison, we did run the same test on a real Doona, and it passed. The seat stayed in one piece and in place.

GARCIA: Amiad Raviv, Doona's commercial manager, said that his company - they are flagging these fakes to Amazon regularly.

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AMIAD RAVIV: We've taken down, just this year, more than 40 pages which had infringing products or fake products just on the Amazon platform alone. And if you assume that each one of these pages is up for, you know, three to seven days, then you're talking about a good period of the year in which fake products - dangerous products - are being sold on Amazon.

BOYKOFF: We sent the results of this crash test to Amazon, and after that, they emailed customers to urge them to stop using it immediately, and they offered them a full refund.

GARCIA: All right, so, like, service journalism - you got some results there. Yeah.

BOYKOFF: We're happy to see that.

GARCIA: Well done.

BOYKOFF: Car seats are just one example of this problem, though. We also bought a toy with magnets that didn't meet federal safety standards. I spoke to a company that made swaddles for babies. They had a customer return one because a zipper pulled off, a potential choking hazard. And when they got the swaddle into their office, they realized it was a counterfeit.

GARCIA: OK. And, Pamela, you actually did reach out to Amazon, and what they said was these are isolated incidents and that safety is a top priority for the company. Amazon also made the point that sellers themselves are responsible for meeting Amazon's high bar for the quality of products and for complying with laws and regulations.

BOYKOFF: Now, Amazon, they are trying to tackle this counterfeit problem. More than 200,000 brands use something called the Amazon Brand Registry. This gives them tools to help them find and flag suspected counterfeits. And Amazon also uses automation to scan and proactively remove suspicious listings.

GARCIA: Yeah. There's this other Amazon program as well called Transparency, which lets companies tag each product with a unique code. And that code can then be scanned to verify that the product is real, although companies in that case need to buy the labels themselves and absorb the cost of adding these codes to their products. Amazon also is starting to list some brands remove counterfeit listings on their own.

BOYKOFF: The companies I spoke to say Amazon's efforts, they have really helped, especially in the last two years. But they still complain the responsibility and the cost of policing fakes feels like it falls on them rather than on Amazon. They all describe it as an endless game of whack-a-mole against counterfeits. Take one down. Another one just pops up. Here's Amiad Raviv again from Doona.

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RAVIV: It would be great if Amazon steps up and works with the brands and with the different advocates in the U.S. in order to prevent these products from ever coming to the platform as opposed to removing them once they're already there.

GARCIA: For its part, Amazon said that it invested $400 million in 2018 to build programs that make sure that the products that it offers on its platform are safe and comply with regulations.

BOYKOFF: So, Cardiff, something I thought was really interesting was that a couple of the people I spoke to - they mentioned they thought the current situation is only going to really change if Amazon and other e-commerce platforms are held liable for safety defects or trademark issues related to these goods sold by third parties.

GARCIA: Yeah. Something interesting that you told me, Pamela, was that right now courts don't see Amazon as the legal seller in these cases of third-party sales. So they treat Amazon kind of like a flea market. When there's a problem, the liability is with the vendor, the stall at the flea market - not Amazon, which is like the landlord that oversees the space where the flea market stall is.

BOYKOFF: A lot of this dates back to a 10-year-old case involving Tiffany, the jewelry brand, and eBay. It set up this idea that the law treats e-commerce really differently from a physical store, like a Target or your corner grocery. Those physical stores, they may not make the products they sell, but they're still liable for problems with them.

GARCIA: But this could change. Recently, an appeals court rejected this interpretation for the first time.

BOYKOFF: The judges in that case, they were like, look. Amazon has so much knowledge and control over its sales platform, and it's so hard for the average person to try and track down and sue a third-party seller. We should hold Amazon liable. That court decision is going to be reviewed next month by the entire 3rd Circuit Court of Appeals. The legal community is watching really closely. Three different lawyers I spoke with thought a change might be coming. It might be this case. It might be another one. But they sense that something is starting to shift.

GARCIA: Pamela, thanks so much for bringing us this story.

BOYKOFF: Nice to be here. Thanks for letting me share it with your audience.

GARCIA: This episode of THE INDICATOR was produced by Leena Sanzgiri. It was fact-checked by Nadia Lewis. Paddy Hirsch is our editor, and THE INDICATOR is a production of NPR.

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