Fighting Fakes: 5 Questions for Amazon’s Counterfeit Crimes Unit

What’s one of the world’s largest retailers doing to combat counterfeits? The U.S. Chamber’s Global Innovation Policy Center interviewed the Director of the Amazon Counterfeit Crimes Unit, Kebharu Smith, to find out.

1. Tell me about the Counterfeit Crimes Unit. What is it, what has it accomplished, and what’s on the horizon?

Amazon’s Counterfeit Crimes Unit is a global team dedicated to pursuing bad actors and holding them accountable to the fullest extent of the law, including working with law enforcement. Our team was established in June 2020 and we’re specifically composed of former federal prosecutors, experienced investigators, data analysts, and others with expertise in catching and prosecuting criminals.

I think it’s important to note that Amazon’s primary objective with regard to counterfeit is to ensure customers never see a listing with a counterfeit or infringing product. As a result, much of Amazon’s investments—teams, tools, technology—are focused on proactive measures that block attempts to open accounts or list counterfeit products, and the vast majority of customers never see a counterfeit when shopping in our stores.

If there’s something our teams and technology missed however, it’s important to Amazon that we investigate and address what happened and why, and also that we hold the bad actor accountable who attempted to list these products or defraud our customers. That’s where CCU comes in, and since our launch, we’ve focused our work on civil litigation and working with law enforcement to pursue bad actors.

Most of our civil filings to date have been with brands, and we’re incredibly appreciative of their collaboration. Brands are the IP owners so partnering with them allows us to go to court with a stronger case. We’ve worked with global brands like Italian luxury fashion house Valentino, and outdoor products designer and retailer Yeti, but it’s also important to us to protect smaller brands who can’t protect themselves against these bad actors. That’s why we’ve also worked with smaller, family-owned businesses like family travel accessory brand JL Childress and Dutch Blitz, a card game manufacturer based in Pennsylvania.

On the law enforcement side, we build criminal referrals at the state, local, and federal levels, and even with international law enforcement. We also share data on every confirmed counterfeiter with law enforcement so they can combine that information with their own intelligence to identify trends and prioritize cases, and support training and capacity building with law enforcement partners. Most of our criminal investigations are ongoing, so we cannot discuss them. However, the Counterfeit Crimes Unit’s partnerships have yielded results. In one instance, a law enforcement partner told us that our joint criminal referral gave the prosecution team a six-month head start for their investigation into bad actors.

2. Can you tell me a bit about your career prior to Amazon and the Counterfeit Crimes Unit?

My career, like many of us on CCU, has been focused on catching criminals. Before joining Amazon, I worked in Washington D.C. as a Senior Trial Attorney with the United States Department of Justice Computer Crime and Intellectual Property Section (CCIPS). I focused on the criminal investigation and prosecution of IP and computer crimes and partnered with federal prosecutors from across the country and the world. Among others cases, I successfully prosecuted two Ukrainian men who were trafficking in counterfeit cancer and hepatitis medicine by shipping the counterfeit drugs and packaging to the United States (and around the world) from the Ukraine. CCU members bring unique strengths and experiences together so we can hold criminals accountable, and more importantly protect customers. 

3. What do we know about the strategies of counterfeiting organizations?  How are they taking advantage of online marketplaces and other emerging retail and supply chain innovations? 

Counterfeiting isn’t new. It has existed for ages. Today’s counterfeiters are sophisticated, engaged in a wide range of criminal behavior, and always evolving. They use both falsified name and contact information and real consumer information they buy off the dark web or pull from public databases to hide their identity. They use fraudulent invoices and infringing packaging, and set up spoofed websites that mimic rights owners to redirect customer traffic. We have also seen counterfeiters manufacturing infringing products abroad and then importing the product separate from the counterfeit label to evade detection.

One emerging scheme these criminals use is to leverage social media influencers to promote and sell their infringing products. Amazon filed a lawsuit in November 2020 against several individuals and businesses who promoted counterfeit products on Instagram and TikTok in an attempt to evade our anti-counterfeiting protections.

Amazon is committed to devoting the resources needed to find these illicit networks and assist law enforcement in dismantling them – this is good for our customers and selling partners, and also has a positive impact for consumers around the world as we go after their criminal infrastructure. 

4. How does the Counterfeit Crimes Unit identify counterfeiting cases and decide whether to pursue legal action?

We identify counterfeiters from our internal data analytics, through cooperation with brands, and of course through joint operations and information sharing with law enforcement. Our tools and technology are pulling in risk signals through a variety of avenues—from seller registration to product listings to rights owner notices to customer contacts—and we extrapolate trends to help us identify potential bad actors and cases. As I mentioned earlier, we pay particular attention to cases where a small business may be affected because we know those companies don’t always have the wherewithal or resources to pursue those cases.

Last year, we launched a joint operation with the National Intellectual Property Rights Coordination Center, called Operation Fulfilled Action, to prevent counterfeit goods from entering the U.S. We share data with the IPR Center to inform targeted inspections at the border and prevent counterfeit products from entering the supply chain, regardless of where bad actors were intending to offer them. That can be a source for leads, and we maintain open lines of communication with law enforcement agencies.

5. How do companies like Amazon lead and compete, while also securing closer cooperation both with the government and other private sector stakeholders on the shared challenge? What additional measures are necessary to address counterfeiting on a national level?

The fight against counterfeiters is a common fight that requires cooperation from everyone who opposes it. Counterfeiters harm our customer experience, they take value away from the overall supply chain, harm a brand’s reputation, and are often linked to other criminal enterprises, so it’s in everyone’s best interest—retailers, brands, law enforcement—to bring an end to counterfeiting.

A key way to combat counterfeits is through collaboration; the more information we share, the harder it is for bad actors to hide. Amazon already has a few data sharing initiatives in place but bringing in more stakeholders—other law enforcement agencies, payment providers, retailers, brands—would allow all of us to break down the silos that hinder cooperation.

Amazon also supports ongoing efforts coordinated by the IPR Center to develop a private information exchange that will enable industry participants—stores, payment service providers, banks, and shipping companies—to better identify and stop counterfeiters before they can reach consumers. We believe information aggregated from such an exchange will lead to more effective law enforcement referrals.

In addition to better information sharing and constantly improving our anti-counterfeiting tools and systems, we need a real deterrent to stop bad actors from counterfeiting. Specifically, we need to see more prioritization of prosecution of intellectual property crimes. We have appreciated partnership from states attorney generals, Homeland Security Investigations (HSI), FBI, FDA, and others – however, the simple fact is that law enforcement has not ramped up resources and funding to match the pace at which criminals are increasing their attempts. In the last year for which we have data, only 0.1% of criminal cases tried were for counterfeiting – and more than half of those resulted in no jail time. This is far too little disincentive to committing IP crimes.

Lastly, convictions are essential to winning this fight. We are working hard to disrupt and dismantle these criminal networks, and we applaud the law enforcement authorities who are already combating this issue. Governments should give legal authorities the investigative tools, funding, and resources they need to bring counterfeiters to justice because criminal enforcement – through prosecution and other disruption measures such as freezing assets – is one of the most effective ways to stop counterfeiters.

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