Amazon Finally Admitted To Investors That It Has a Counterfeit Problem

Amazon has for the first time acknowledged sales of counterfeits and pirated items as a risk in its annual earnings report to investors and the U.S. SEC. 'Some third-party sellers have been using the reach of Amazon's marketplace as an opportunity to sell counterfeit and pirated items,' reports Quartz. 'The pressure on the company has been growing as brands such as Birkenstock and Mercedes Benz have lambasted it for not being able to control the problem.' From the report: Under the section of 'risk factors' to the business, Amazon says it 'could be liable' for the activities of its sellers, and explains: 'Under our seller programs, we may be unable to prevent sellers from collecting payments, fraudulently or otherwise, when buyers never receive the products they ordered or when the products received are materially different from the sellers' descriptions. We also may be unable to prevent sellers in our stores or through other stores from selling unlawful, counterfeit, pirated, or stolen goods, selling goods in an unlawful or unethical manner, violating the proprietary rights of others, or otherwise violating our policies. Under our A2Z Guarantee, we reimburse buyers for payments up to certain limits in these situations, and as our third-party seller sales grow, the cost of this program will increase and could negatively affect our operating results. In addition, to the extent any of this occurs, it could harm our business or damage our reputation and we could face civil or criminal liability for unlawful activities by our sellers.'

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