You can buy a fake version of just about anything. From counterfeit olive oil and wine to fake Yeezy sneakers and Kylie beauty products, virtually whatever knockoff you could want is available, thanks to the giant $1.2 trillion global counterfeit industry.
This shadowy industry used to thrive mainly in alleyways in certain cities, but these days, many counterfeits hide in plain sight on the internet. Marketplaces like Amazon and eBay are riddled with fake goods, to the point that companies like Birkenstock now refuse to let wholesalers post their products on Amazon.
Luxury brands lose about $30 billion worth of income a year to fake goods sold online, and the money that fuels the industry has been linked to terrorism, among other criminal activities. And counterfeits plague just about every corner of the web; according to one study done last year by the Government Accountability Office, in a sample of commonly counterfeited products bought on the websites of Amazon, Sears, Walmart, eBay, and Newegg, about 40 percent were fake. Now, counterfeits have a new opponent: the Trump administration.
Last week, President Donald Trump signed a memorandum aimed at counterfeits — specifically, according to the White House National Trade Council Director Peter Navarro, against sites like Amazon, Alibaba, and eBay. In the memo, Trump tasked the Department of Homeland Security and the Commerce Department, among other federal groups, with spending the next few months drafting a plan to combat counterfeits. Trump wants to hold these marketplaces accountable by gathering data on their supply chain, like tracking down the sellers and warehouses that distribute these goods.
“This is a warning shot across the bow that it is your job to police these matters, and if you won’t clean it up the government will,” Navarro told reporters.
Amazon and eBay have long battled with the issue of fakes, as have Instagram and Etsy. Even seemingly more credible luxury sites like the Real Real have come under fire for selling fakes (the Real Real is being sued by Chanel for allegedly allowing counterfeit Chanel products on the site).
Shoppers and sellers have been complaining for years that sites like eBay and Amazon don’t do enough to combat counterfeits. Up until recently, for example, Amazon would wash its hands of any blame about fakes on its site, dismissing counterfeit issues as the problem of third-party sellers instead. (Over half of products sold on Amazon come from sellers who use the tech giant’s Fulfilled by Amazon service. The company acts as a middleman between Amazon sellers and customers, taking care of the shipping and payment process, but the service ultimately allows Amazon to be protected against liability.)
Swatch CEO Nick Hayek told the Wall Street Journal last year that the watch company’s partnership with Amazon hit a wall because it failed to agree to a “commitment that Amazon proactively police its site for counterfeits and unauthorized retailers.” Meanwhile, according to the research group Gartner L2, one in three products in certain categories (like headphones and clothing) on Amazon has a review claiming the product is counterfeit. (In an emailed statement to Vox, Amazon said it “strictly prohibits the sale of counterfeit products” and that it welcomes “additional coordinated support from law enforcement so we can hold bad actors accountable”).
“The Amazon marketplace, which operates as an ‘open market,’ creates an environment where we experience unacceptable business practices which we believe jeopardize our brand,” Birkenstock CEO David Kahan said in 2017 after pulling its products from Amazon. “Policing this activity internally and in partnership with Amazon.com has proven impossible.”
EBay, too, has been the subject of complaints regarding selling fakes, as has Alibaba. Both shopping sites have faced complaints that they don’t take enough strict measures, like banning sketchy sellers and deleting obvious counterfeit listings. (In a statement emailed to Vox, an Alibaba spokesperson said the company welcomed Trump’s new pursuit against counterfeits and “the attention it brings to the global fight against counterfeiting.”)
Even while these companies haven’t figured out a solution to tackle counterfeits, the industry has gotten more sophisticated. Some authenticators have said it’s nearly impossible these days to spot the difference between a fake luxury bag and a real one, dubbing these products as “super fakes.” In 2017, Vogue reported that some high-quality fakes are even made in the same factories as authentic luxury products.
Companies like Amazon, eBay, and Alibaba have taken some action to fight counterfeits. Two months ago, Amazon launched “Project Zero,” which will allow brands to flag and delete fake listings. Alibaba has its own task force that inspects the site for fake goods, and Alibaba founder and CEO Jack Ma openly talks about fighting against counterfeits.
Still, critics say these companies aren’t doing enough to take on the burgeoning and sophisticated counterfeit industry, and because they act as middlemen, they’ve largely been allowed to avoid repercussions. The Trump administration believes backdoor profits are a factor when it comes to being lax on counterfeits; Navarro says establishing a blueprint for these companies to be held accountable could force them to toughen up.
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Update 4/8: This story has been updated to include statements from Amazon and Alibaba.