Sources: Under pressure from Amazon-led group, China-focused Senate bill left consumer protections aside for markets to authenticate third-party sellers– Senators ruled out a measure to protect consumers from counterfeit and dangerous items sold online after aggressive lobbying by Amazon.
Sen. Richard J. Durbin (D-Ill.), the second-highest-ranking Democrat, and Sen. Bill Cassidy (R-La.) introduced the measure in March, and pushed to have an amended version included in the landmark United States Innovation and Competition Act.
But the effort to include the bill was scuttled, in part after a group led by Amazon raised repeated objections to the measure, according to congressional aides who spoke on the condition of anonymity because they were not authorized to speak publicly about the internal deliberations. That came as a disappointment to supporters of the legislation, who had hoped that a bipartisan effort endorsed by key lawmakers would overcome the resistance of the e-commerce giant and secure passage in the China package.
“Big Tech rigged the bill, killing the requirement that companies like Amazon inform consumers who their big third-party sellers are and where those products come from, which is mainly China, so we don’t get scammed or injured,” said Lori Wallach, an advocate at the watchdog group Public Citizen.
Amazon CEO Jeff Bezos owns The Washington Post.
“Like many other companies, including online retailers and small businesses that sell online, we had concerns with attaching controversial legislation pushed by big-box retailers to the broader China bill,” Amazon spokesman Alex Haurek said in an emailed statement.
Last year, the company adopted one of the bill’s provisions: It required third-party merchants on its U.S. site to disclose their names and addresses on the page where they list seller information.
But it has balked at adopting other steps included the measure, in part because the company says it already has anti-fraud programs in place. The company opposes the bill because it “favors large brick-and-mortar retailers, at the expense of small businesses that sell online, while doing nothing to prevent fraud and abuse or hold bad actors accountable,” vice president of public policy Brian Huseman wrote in an April blog post. Amazon has created a thriving marketplace that has given rise to many of those third-party sellers.
Instead, Huseman suggested lawmakers pass legislation that increases the penalties against online fraudsters as well as providing more resources for law enforcement to thwart them.
“We stand ready to help them to do that,” Amazon’s Haurek said.
One reason counterfeit, stolen and unsafe products can still be found on Amazon is that the company has prioritized offering customers a broad selection of products at low prices. To do that, it opened its marketplace to third-party sellers, which also allowed rogue merchants to hawk dubious goods. Many of those sellers are based in China, which is why the measure’s supporters wanted to include the provisions in the Senate’s China package.
With hundreds of millions of items available at any given time on Amazon, the company has created a marketplace that makes it virtually impossible for the company to police all listings from the third-party firms, which account for about 60 percent of sales on the site. Instead, the company uses technology to detect fraudulent or dangerous goods, while also employing thousands of workers to root out problematic products.
Amazon says it spends hundreds of millions of dollars each year to police its site for fake goods. But they still proliferate. A Post investigation found that Hermès, Gucci and Louis Vuitton counterfeits were still easy to find on the site as recently as two years ago, despite pledges by the company.
Earlier this week, a senior researcher at liberal media watchdog group Media Matters for America tweeted a screenshot of a third-party merchant selling a 10-pack of blank covid-19 vaccination cards with the U.S. Centers for Disease Control and Prevention logo for $12.99 on Amazon’s marketplace. Fraudsters could use the cards to falsely claim they have been vaccinated. The Post found three other similar listings on the site the same day. Amazon has since removed all of the products.
“We have proactive measures in place to prevent prohibited products from being listed and we continuously monitor our store,” Amazon spokeswoman Mary Kate McCarthy said via email. “In this case, we have removed the items and taken action on the bad actors involved in bypassing our controls.”
Amazon has also faced criticism over the sale of dangerous goods by third parties.
Lawmakers amended the Inform Consumers Act after Amazon raised privacy concerns regarding its third-party sellers, one of the congressional aides said. Rather than posting a seller’s real name and contact information on the product listing page, the amended measure required for those details to be provided only after a sale.
The revised bill also raised the threshold for sellers to have to disclose that information to e-commerce marketplaces. To be mandated to do so, sellers must register 200 transactions amounting to an aggregate of $7,000 in sales on the marketplace, up from $5,000 in the original proposal.
Even though the measure did not make it into the Senate’s China package, some supporters believe it could be revisited. The bill still must be adopted by the House, offering the possibility that the measure can be added there or in the conference committee that would need to reconcile differences between bills passed in each chamber.
“We would have loved to have this included in the China package, but it’s not the only game in town,” said Stephen Lamar, president and chief executive of the American Apparel & Footwear Association, whose members include Adidas America, The North Face and Calvin Klein.