The holiday season is a reminder that with more Americans than ever going online to shop, lawmakers must continue to take action to keep consumers from falling prey to Internet scammers. That’s why it was good news when Amazon recently reverse course on his long-standing opposition to bipartisan consumer protection legislation in Congress that would require third-party online marketplaces to audit independent sellers, in an effort to reduce counterfeits and stolen goods on those platforms.
But as Amazon’s change of public opinion apparently paves the way for the bill’s eventual passage, known as the INFORM Consumers Act, lawmakers must ensure that the retail giant and other tech companies aren’t working behind the scenes to water down the legislation and make it toothless. Counterfeits seriously harm consumers and small third-party sellers, and Congress must adopt strong and comprehensive enforcement mechanisms to adequately protect both groups.
Amazon’s decision to support INFORM was certainly a surprise. This summer alone, Amazon launched an aggressive lobbying campaign kill a more robust version of the legislation. But while Amazon ostensibly backs the current bill, it would let go of his lobbyists in the ring road to weaken it. While lawmakers such as Senator Dick Durbin, one of the bill’s co-sponsors, say they refuse for this to happen, they need to stay on high alert.
That’s because we’ve seen Amazon’s playbook publicly supporting the legislation while simultaneously working to weaken it behind the scenes. For example, Amazon CEO Jeff Bezos received praise earlier this year when he passed President Biden’s plan to raise the corporate tax rate. But behind the scenes, the company enlisted an army of lobbyists to maintain the research and development tax credit, which is expected to save the company hundreds of millions of dollars a year. As I have said before, Bezos’ support for a corporate tax hike doesn’t make sense if the company can continue to engage in blatant tax evasion schemes.
And it’s not just Amazon; other large tech companies have used similar “two-sided” tactics to weaken the legislation. In April, investigation by The Markup uncovered how some of the country’s most powerful tech companies, including Facebook and Google, argued for mostly toothless privacy legislation in state houses across the country – all with the intention to prevent state legislators from taking more stringent measures in the future.
Now, with the prospect of a comprehensive consumer protection measure enacted, Congress must resist the twist of Amazon’s arm. Counterfeits are far too serious a threat, and watered down legislation will fail to create the bold transparency measures that are desperately needed. Online counterfeiters are notorious for peddling children’s toys and products, putting the most vulnerable in serious danger. These products do not go through rigorous safety testing, which means there is the potential for serious health consequences.
But what many may not realize is the impact of counterfeits on third-party sellers. As someone who works with Amazon sellers every day, I know exactly how legitimate businesses suffer when criminals sell fakes for less than market value. Small businesses are doing all they can to fight these criminals, even if it means expenses hundreds of thousands of dollars to do it.
Many of those who sell counterfeits from the comfort of their homes and harm American businesses are overseas. According to the Department of Homeland Security, a mind-boggling 85 percent contraband items seized by US Customs and Border Protection came from Hong Kong and China. Nevertheless, the Amazon market has become a hub for China-based sellers.
Amazon has no problem bragging about all the steps it has taken to clean up its third-party marketplace. But, as I have Explain, it’s a common tactic in Amazon’s PR department to simply share the numerator – not the denominator. So the $ 700 million it invests to fight fraud is pennies in the bucket considering that Amazon’s global gross merchandise volume is estimated at 490 billion dollars.
It is essential that Congress advances the INFORM Consumer Law as it exists today. While I welcome Amazon’s approval of the common sense measure, as well as the other third markets who recognize the benefits this would bring to shopping online – can only hope this is sincere. Working behind the scenes to weaken this bill will be devastating for the millions of buyers and sellers who now depend on Amazon’s third-party marketplace.
Jason boyce is the author of “The Amazon Jungle” and the founder of Amazon’s managed services agency, Avenue7Media. Previously, Boyce was among Amazon’s 200 best sellers for 18 years.