White House Anti-Counterfeit Measure Could Strike at Amazon and eBay

WASHINGTON, April 4, 2019 — The White House’s latest move to protect American industries and consumers could potentially give President Trump an opening to hit back at some of his favorite targets.

National Trade Council Director Peter Navarro on Wednesday announced that the President had signed a Presidential Memorandum to combat “a very serious problem” — the trafficking of counterfeit goods through online marketplaces like Amazon, AliBaba, and eBay.

“President Trump has decided that it’s time to clean up this wild west of counterfeiting and trafficking,” said Navarro.

Navarro told reporters that the administration’s strategy for combatting counterfeit goods would follow what is now a well-established process of using a Presidential Memorandum to order a study to determine what executive actions can be taken to accomplish a particular goal, followed by an Executive Order to implement the actions recommended by the study.

Consumers, he said, have a 50 percent chance of receiving counterfeit goods through online marketplaces like Amazon, citing data collected during a Customs and Border Protection operation. But shortly after that he admitted that administration officials “certainly don’t know with any certainty how much counterfeiting is going on,” from where the counterfeit goods are coming, or how they are making it into the United States.

Still, Navarro said sites operated by companies like Amazon represent the “central core” of the problem and suggested that the administration is looking for ways to punish them if counterfeit goods are sold through their platform.

“Right now these third-party online marketplaces, together with the ecosystem that supports them…have essentially zero liability when it comes to these counterfeit goods,” he said. “That simply has to stop.”

Making a third-party marketplace operator like Amazon financially liable if counterfeit goods are sold on its platform could potentially deal a huge blow to the company and would undoubtedly impact the bottom line of founder and CEO Jeff Bezos, whom the president has attacked in retaliation for his ownership of The Washington Post.

Trump frequently suggests that Bezos’ purchase of the venerable newspaper — which he often derides as the “Amazon Washington Post” or as a “Lobbyist Newspaper” — was meant to allow him to intimidate politicians and prevent the retail giant from being subject to regulation.

Asked whether there was a chance that Trump’s enmity for Bezos played a role in his decision to go after online marketplaces, Navarro replied that there was “absolutely zero” chance that Trump’s memorandum is a way of targeting Amazon.

A senior White House official who was contacted by BroadbandBreakfast explained that this latest use of executive  authority came to be as a response to “the numerous calls for help from American manufacturers hammered by counterfeiters.”

While the President cannot unilaterally change laws to make third-party marketplace owners liable for the goods sold on their platforms, the official said the study ordered by the memorandum would guide the administration’s next steps, including possible legislation.

An Amazon spokesperson that BroadbandBreakfast reached by email declined to address the possibility that Trump could once again be targeting Amazon, but noted in a statement that the company “strictly prohibits the sale of counterfeit products” and welcomes support from law enforcement.

The spokesperson added that the company “invests heavily in proactive measures to prevent counterfeit goods from ever reaching our stores,” and spends approximately $400 million each year to fight “counterfeits, frauds, and other forms of abuse” with tools that “ensure that over 99% of the products that customers view on Amazon never receive a complaint about counterfeits.”

“Bad actors that attempt to abuse our store do not reflect the flourishing community of honest entrepreneurs that make up the vast majority of our seller community,” the spokesperson said. “We estimate these businesses have created more than 900,000 jobs worldwide and they provide our customers with vast, authentic selection.”

(Pool photograph of Peter Navarro in Trump Tower by Albin Lohr-Jones.)