Jul 27, 2022 - News

Lawsuits allege Amazon.com counterfeit scheme

Illustration of a price tag on a toy stethoscope.

Illustration: Lindsey Bailey/Axios

Seattle-based Amazon and the 3M Company recently teamed up to sue more than 60 third-party sellers, alleging they peddled knock-off 3M medical equipment as part of a counterfeiting ring on Amazon's retail website.

Driving the news: In lawsuits filed in U.S. District Court in Seattle last Friday, Amazon and 3M contend a group of individuals and entities, "both known and unknown," used aliases and unregistered businesses to open dozens of retail accounts on Amazon.com that sold counterfeit stethoscopes carrying 3M brands.

  • Each complaint contends the group "conspired and operated in concert … to engage in the counterfeiting scheme" worldwide.

Details: The lawsuits cite false advertising, trademark infringement and violation of Washington's consumer protection law among the causes of action.

  • They also claim the group of defendants — operating under a variety of business names such as "Mooky Store," "Billy Business" and "David Factory" — intentionally hid their true identities and whereabouts when registering third party-seller accounts.
  • The suits seek, among other things, a court order requiring "identified financial institutions" linked to the sellers' accounts to block and transfer back to Amazon all money "arising from" the alleged scam.

What they're saying: "Defendants have deceived Amazon's customers and Amazon, infringed and misused the IP (intellectual property) rights of 3M, harmed the integrity of and customer trust in the Amazon Store, and tarnished Amazon's and 3M's brands," the suits state.

  • "Such fake products specifically taint 3M's reputation for safe, and reliable medical equipment that is more valued than ever in the present reality of COVID-19, as the company is utilizing its decades of expertise to supply providers with the tools they need to save patients' lives," the suits say.

Background: The suits are among Amazon's latest efforts to weed out fake products and counterfeiters from its retail website.

  • The e-retail giant has spent more than $900 million and hired more than 12,000 people to guard against fraud and has prevented over 2.5 million "suspected bad actor selling accounts," per the suits.
  • In 2021, Amazon also sued more than 170 counterfeiters in U.S. courts and sued or referred more than 600 cases for investigation in the U.S., Europe and China, a company spokesperson told Axios this week.

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