E-commerce companies such as Amazon and eBay are currently not liable for counterfeit goods sold by third-parties on their platforms, but that could change thanks to newly proposed legislation.
As CNBC reports, four House members have co-sponsored the Shop Safe Act, which would implement new measures to ensure online marketplaces are better policed and ultimately make the platform owners liable for any counterfeit goods sold.
One of the House members sponsoring the bill, Jerrold Nadler, Chairman of the House Judiciary Committee, explained, “American consumers increasingly turn to the internet to shop. Counterfeiters have followed consumers, and it is clear more must be done to combat the rising trend in online sales of counterfeit products. Consumers should be able to trust that what they see and purchase online is what they will get, but counterfeiters continue to join platforms with ease and masquerade as reliable sellers in order to infect American households with dangerous and unsafe counterfeit products. The SHOP SAFE Act proposes a set of commonsense measures to tackle the gaps in these platforms’ systems and stop counterfeit sales.”
The commonsense measures proposed in the bill include establishing trademark liability for companies selling counterfeits, requiring online platforms to “establish best practices to vet sellers to ensure their legitimacy, remove counterfeit listings, and remove sellers who repeatedly sell counterfeits,” and enforcing contributory liability against any online marketplace that does not prevent the continued sale of counterfeits by a third-party seller.
If the Shop Safe Act legislation passes, the focus will be placed firmly on the platform owners to properly police their own marketplaces. That would surely cost the platforms more in terms of time, effort, and operational costs, but as trademark lawyer Josh Gerben rightly points out, “Quite frankly it is about time that Congress did something about it because the online marketplaces that exist today have not put consumer safety first.”