Amazon and the Issue of Trust

To say that Amazon has been late to the party when it comes to combating counterfeit goods would not be entirely unfair. Despite claims of action and regulation, as recently as April 2020 several of Amazon’s international sites were listed as notorious markets for counterfeit and pirated goods. What’s even more striking is that the list was published by the US government itself.

Whatever the motivating factor was, it’s difficult to not say that Amazon has beefed up its response in that area. Launched last year, the retail giant’s Counterfeit Crimes Unit has been trying to champion the cause, urging businesses and governments alike to work with it to fight the tide of fake goods globally. They have developed various tools and brand registries as weapons in the fight, and are offering these to partners with transparency in the hope they help spur a more unified front against criminals.

Even the usual refrain of “actions not words” doesn’t seem to apply to Amazon’s response. Earlier in the year, Amazon suspended numerous high-profile third-party brands from their platform for violating its marketplace code of conduct. Big names such as Mpow and Aukey disappeared from the site, and a number of them have yet to return. The impact was so great on Chinese third-party sellers that the city of Shenzen was paying vendors to create their own online marketplaces so that they could avoid Amazon. Even the Chinese government has made noises about helping its businesses better navigate the different customs of international retail.

But.

For Amazon to successfully lead a fight against fraudulent and illegal business practices, it requires the trust and goodwill of thousands of global businesses and brands, big and small, partners and rivals. And Amazon has a trust problem.

Not necessarily with consumers (after all, Amazon recently topped yet another brand loyalty poll), but the recent damning news from Amazon India is sure to make many in the retail space think twice about how they approach the company and its international marketplaces.

Reuters recently uncovered documents detailing Amazon’s business practices in the region, namely how they would identify and copy third-party sellers’ products, before rigging the search results to display the company’s own products at the top of the page. This is the first time there has been hard evidence of these sorts of practices and comes after years of question from sellers as to where Amazon designs and sources its own-brand goods. In even more shocking news, the documents show that executives such as Diego Piacentini, who was in charge of Amazon’s international business, and Russell Grandinetti, senior vice president of international consumer were aware of the practice. As these two are members of the senior management team, they worked closely and reported directly to Jeff Bezos. Amazon will find it hard to deflect accusations that this was not an isolated initiative by a regional team, but something condoned by the business at large.