Gemini Shippers Group , joined a multi-trade association letter sponsored by the Toy Association to the House Judiciary Committee bringing attention to the need for the US government to continue to address the issues of counterfeit goods
Dear Chairman Nadler, Ranking Member Collins:
On behalf of the undersigned organizations representing U.S. rights holders and manufacturers, both large and small, we would like to thank the House Judiciary Committee for its vigorous support in bringing attention to the significant issue of the sale of unsafe counterfeits on ecommerce marketplaces.
While ecommerce has provided many opportunities for legitimate companies to grow and reach new consumers, it has also contributed significantly to a disturbing rise in illicit trade. The current online marketplace structure incentivizes a “hands off” approach to ensuring the quality, safety and authenticity of the products sold. The drive to quickly provide more products at cheaper prices has come at a significant cost—counterfeit products damage businesses, disregard regulatory protection and, at worst, threaten consumer health and safety. To effectively combat this, we encourage the committee to pursue legislation that would change the incentive structure by holding marketplaces to the same liability standard as brick-and-mortar stores in an effort to ensure the compliance of products sold on their sites.
As identified in a recent Organisation for Economic Cooperation and Development (OECD) report, trade in fake goods has grown steadily in the last few years, exceeding $500 billion and accounting for 3.3% of global trade. In this environment, the most robust efforts to address the sale of illicit goods have thus far been ineffective. Barring significant changes, marketplaces will continue to be rife with unsafe knockoffs that threaten U.S. consumers and businesses.
Trade in counterfeits, knockoffs and other intellectual property infringing items not only damages legitimate U.S. businesses, but also fuels other illicit crimes and poses significant safety risks for U.S. consumers. That’s why any solution must extend beyond merely addressing the trade in fakes and encompass measures that ensure the quality of the products we, as consumers, purchase every day. Consumers should have the same assurance that the products they purchase are compliant regardless of whether they are bought online or in a brick and mortar store. We represent companies that invest substantial resources to ensure the safety and quality of the products they sell, and U.S. laws hold our members accountable to do so. It’s time a system is established that evens the playing field.
To that end, we encourage Congress to establish a system that promotes accountability. We join together to support for legislation that makes third party intermediaries, including online marketplaces, liable for ensuring that products sold on their platforms comply with U.S. laws and regulations. We also encourage Congress to increase the requirements necessary for individuals to sell on ecommerce marketplaces by establishing a minimum threshold for submission and validation of identification, banking, and product authentication documentation. In tandem, these solutions would result in a greater assurance that the products U.S. consumers are purchasing are authentic and, more importantly, safe.
Moreover, many online marketplaces at present do not enforce effective policies for repeat infringers, including termination of sellers and all their related accounts and listings. For this reason, we also ask that Congress explore having online marketplaces implement a “three strike” or similar system that permanently bans bad actors from conducting illicit business on their platforms.
We are ready to work with you and members of the Committee to further raise awareness and develop solutions to combat the sale of counterfeits online. Please feel free to reach out to any one of the associations listed below to discuss how we can support this effort.