Overview:

CNN’s 30 mph crash test showed the car seat broke apart, failing US officials’ minimum standards. The toddler dummy twists as the car seat fractures and slides forward, sending plastic parts flying. An authentic Doona met federal requirements in an identical crash test, with the infant car seat staying intact and around the dummy.

Dr. Alisa Baer, a pediatrician, and nationally certified child passenger safety teacher, examined the test results and said a car seat failure in a real crash could put a child in “grave danger” and cause chest, neck, or head injuries, including traumatic brain injuries.

CNN bought the copycat Doona and crash-tested it at the University of Michigan Transportation Research Institute as part of a months-long probe into Amazon’s sale of counterfeit and patent-infringing children’s products. Seven company owners told CNN that counterfeiters were targeting their products on Amazon’s third-party vendor marketplace. Amazon required companies to report suspicious listings, which often resulted in a “whack-a-mole” game of new listings appearing almost immediately after flagged ones were removed.

Amazon baby car seats broke in 30 mph crash tests, failing federal standards.

Amazon Car Seats Broke In 30 MPH Crash Tests, Failing Federal Standards:

CNN:

Amazon is not liable for third-party goods that directly infringe the intellectual property or are unsafe under US case law. Third-party sellers are liable. The law treats brick-and-mortar stores like Target (TGT), Walmart (WMT), and even your local grocery differently. Even if a physical store didn’t make the goods, you could use it if it infringes on your trademark or is defective.

Amazon is the world’s biggest e-commerce platform, and its dominance is rising. Amazon controls 37.7% of US e-commerce sales, and eMarketer expects that share to rise. Many firms told CNN they couldn’t afford to sell on Amazon. Amazon told CNN that “our customers expect that when they make a purchase through Amazon’s store—either directly from Amazon or from one of its millions of third-party sellers—they will receive authentic products.”

Doona’s commercial manager, Amiad Raviv, said the firm found over 40 Amazon listings this year with counterfeit or infringing versions of its products. Doona alerts Amazon, which removes the ads. Raviv and other business owners told CNN that this piecemeal process means listings are often online for several days, giving customers a large window to buy the potentially dangerous product.

Amazon’s website or app sells fake Doonas, not Amazon. 58% of Amazon’s 2018 annual report sales came from its millions of third-party vendors, many of whom ship directly to consumers. Doona and other legitimate brands sell through approved third parties. However, Amazon workers cannot check or warehouse these items.

“Many Amazon users think it’s real because it’s on Amazon. Raviv denied this.

CNN purchased a Chinese-shipped Strolex device. This seat did not have NHTSA certification marks, even though all USA baby car seats must be. It claimed to have European certification on Amazon, but when it came, it was missing a required label and the European registration number in the instruction manual was a copy of Doona’s.

Amazon Fake Products Doona Labels:

Before the crash test, Baer identified several red signs in the car seat. The anti-rebound bar misspelled “always” as “aiways,” the seat had European warning labels instead of American ones, and the child harness straps had a safety label sewn through the webbing, which she thinks could weaken them.

After CNN ordered the seat, Amazon removed the Strolex listing, but the seller stayed. When called in China, a Strolex representative said in English, “my products are safe,” but refused to give his name or answer any other questions.

CNN gave Amazon the crash test data. A week later, Amazon emailed buyers to warn them of a safety issue and give a full refund.

Amazon told CNN safety was its top concern, but sellers must meet its “high bar” for product quality. “We require all products offered in our store to comply with applicable laws and regulations and have developed industry-leading tools to prevent unsafe or non-compliant products from being listed in our stores,” an Amazon spokesperson said in an email.

Seats:

Last year, a customer called to complain that a zipper pull had broken off the “Love to Dream” baby swaddle, scaring the new mom and posing a choking danger for her baby. Luanne Whiting-Lager and Bengt Lager realized their product was being copied. Regal Lager, the couple’s firm, discovered the $34.99 swaddle was a fake after the customer bought it on Amazon’s marketplace. The fake product copied Love to Dream’s signature and patented swaddle shape, which allows babies to put their hands to their mouths. Regal Lager showed CNN the fake swaddle and the payment.

Regal Lager is the exclusive US distributor of the “Love to Dream” swaddle and participates in Amazon Brand Registry, Amazon’s official program to help companies secure their IP.

The company found online complaints about the fake product’s zippers falling off and its neck opening being too big or tiny, which could ride up over the baby’s mouth while it sleeps.

Love To Dream/Clare Lapworth:

Marketplace Ninjas, an agency that helps Amazon brands, persuaded Amazon to remove 20 listings for infringing on their product. The agency constantly watches Amazon and other e-commerce sites to catch counterfeiters’ new tricks, such as listing the product as Luv 2 Dream and then changing it to Love to Dream. “One down, one up,” Whiting-Lager said.

Regal Lager says cheaper copycats hurt their company. Based on their sales volume, they lost $250,000 or 3% of their Amazon sales in the ordeal.

The couple likes working with Amazon but thinks the company should take full responsibility for its products and limit who can post products using Amazon’s specific identification numbers to prevent counterfeits.

“Whack-A-Mole”

Amazon has three counterfeit-protection schemes. Business owners CNN spoke to say Amazon’s initiatives have helped address the issue, but they say they shoulder the cost and responsibility of policing fakes.

Amazon Brand Registry has over 200,000 firms. The free 2017 program allows rights owners to search their global listings by word or image and mark potential infringers. Amazon immediately removes suspicious listings. Amazon says, “brands in Brand Registry, on average, are finding and reporting 99% fewer suspected infringements than before the launch of Brand Registry.”

Crazy Aaron’s Thinking Putty founder Aaron Muderick said his receptionist spends 15–20 hours a week sending forms to Amazon and other e-commerce sites to remove trademarked goods. He trademarked “Thinking Putty,” “Liquid Glass,” “Puttyworld,” and a drawing of him wearing glasses.

Crazy Aaron’s Thinking Putty Creator Aaron Muderick:

Amazon Brand Registry. The tool is useful and has grown over time, but he’s disappointed, given Amazon’s AI and software prowess.

“It doesn’t work well,” Muderick said. “The whack-a-mole game has improved, but it still exists every day.”

When pNeo’s CEO, Charlotte Wenham, found in 2018 that sophisticated counterfeiters were targeting her company’s Baby Shusher, a sound machine to help babies sleep, she joined Amazon’s brand registry. Wenham thought that counterfeit battery fluid could harm a sleeping baby based on seller complaints.

Wenham said the counterfeit goods copied Baby Shusher’s packaging and user manual. Iris Wilbur-Kamien assumed she bought a Baby Shusher on Amazon until it broke five months later. She told CNN she realized it was a counterfeit when the real firm asked her to send a photo of the product’s identification code. 

Wenham estimated that counterfeits cost her company over $100,000. She thinks Amazon should act faster when counterfeits threaten a legitimate maker. She lost sales every day the counterfeits were on the site.

A Fake Baby Shusher (Left) And The Real Thing (Right):

pro

Amazon doesn’t help. “We had to manage it,” Wenham said. Amazon no longer sells counterfeits in the US, but it tests products from other nations.

Amazon Transparency lets brands add unique codes to goods. Amazon and customers can read these codes to verify authenticity, but brands must buy special labels from Amazon for 1-5 cents per item. Labeling each object costs the brands. Amazon said 6,000 firms had joined Transparency.

Transparency was too expensive for Regal Lager. Bengt Lager said, “It seems backward that the good guys are paying for the bad guys’ behavior.”

Project Zero, Amazon’s third brand protection tool, uses machine learning. Amazon’s “self-service counterfeit removal tool” lets brands quickly remove counterfeits from the platform and provide feedback to Amazon’s automated system to identify fakes.

Aaron Muderick displays copycat goods at his Norristown, Pennsylvania headquarters. In the past year, European officials have issued 19 safety alerts for putty and slime products due to high levels of boron, lead, barium, and magnets.

Muderick sees competing goods reappear under new names and packaging as he becomes more aggressive about trademark violations. Despite not violating his copyrights, he worries about the safety of these generic product names. He estimated copycat and infringing goods cost him 10-30% of sales.

CNN bought six cheap magnetic putties on Amazon. Each tin contained putty and a tiny magnet to attract or repel it. The set’s magnets failed federal toy standards for children under 14. Amazon listed the product as safe for 3+ year-olds. Due to the risk of intestinal blockage or perforation, children’s toys cannot contain tiny, powerful magnets.CNN researchers from Rutgers University found the magnet was much greater than the federal limit for a swallowable magnet.

Muderick often finds unsafe generic putty goods on Amazon, but he doesn’t know how to report them. When he uploads a form saying a listing violates his copyrights and trademarks, Amazon responds, but reporting potential safety issues is more opaque.

Amazon said they are investigating counterfeits associated with CNN’s brands and will take “appropriate action against the sellers involved.” An Amazon spokesperson called these issues “isolated incidents that do not reflect the fantastic products and customer experience provided by millions of small businesses selling in our store.”

“Mystified”

Amazon’s spokesperson told CNN that consumers expect authentic products on Amazon regardless of the seller. Amazon is not legally obligated to do that. Many US judges have ruled that e-commerce sites are not liable like physical stores. E-commerce sites claim they are simply a virtual marketplace for third-party sales. Amazon also says that section 230 of the Communications Decency Act, which shields online platforms from liability for a speech by others, covers product listing claims and warnings.

Given Amazon’s extensive control over its marketplace and the challenges customers face in suing third-party sellers, some courts are reconsidering past decisions on Amazon’s liability.

A Philadelphia appeals court found Amazon could be held liable for a woman who was blinded in one eye when a defective dog collar she bought from Amazon broke, and a retractable dog leash hit her. She and Amazon couldn’t find the collar’s third-party seller. The judges found that Amazon had “substantial control” over its vendors and was the only party the wounded plaintiff could sue.

Sadie. Sadie’s retractable leash snapped back and hit her owner, blinding her in one eye after a faulty Amazon collar broke. 

Sadie. Sadie’s retractable leash snapped back and hit her owner, blinding her in one eye after a faulty Amazon collar broke.

Heather Oberdorf Counsel David Wilk:

Amazon claimed it was a marketplace provider, not the vendor, and therefore not liable. The Communications Decency Act also shielded it.

The entire Third Circuit Court of Appeals will review the ruling in 2020 due to its importance. Until then, the initial ruling is unenforceable.

Product liability professor Mark Geistfeld at NYU School of Law thinks Amazon’s liabilities will change soon. He said customer expectations are key. A buyer in a store or on Amazon knows a product may be made by a third party, but they expect it to be good.

“I am sort of mystified by the court’s failure to see why Amazon is not the seller for liability law,” he said.

Amazon’s power over listings, seller terms, and artificial intelligence software is also a concern. Some experts think 2010 trademark cases like Tiffany v. eBay, which found e-commerce platforms not liable for seller infringement, are outdated.

It’s changing. “It can’t be the same standard as 10 years ago,” said Kari Kammel from Michigan State University’s Center for Anti-Counterfeiting and Product Protection.

Jason Drangel, a lawyer for big toy manufacturers in counterfeiting lawsuits, concurs.

“The platforms that exist now basically control the products; they understand that the products come from a specific country, a specific seller in China,” he said. “It’s a different world.”

Politicians Are Also Pressuring Amazon Over Counterfeits And Safety:

Three Democratic senators wrote to Amazon CEO Jeff Bezos in August to express their “grave concerns regarding Amazon’s failure to remove illegal, deadly and deceptive products, and to provide visible warnings on the products sold on your platform” in response to a Wall Street Journal investigation into counterfeits on the site. Bezos faced a list of queries from Senators Richard Blumenthal, Robert Menendez, and Edward Markey about platform safety. Amazon’s response didn’t satisfy Senator Menendez’s staff, CNN reported.

Republican Congressman Doug Collins asked why Amazon, eBay (EBAY), and Walmart did not attend a July House meeting on counterfeits. He urged platforms to find a better, automated way to detect and block counterfeit listings, to better vet sellers and prevent counterfeiters from listing products under different names, and from stopping counterfeiters from using genuine brand photos to market their products without consent.

Rep. Collins stated that our major online marketplaces should have already implemented these solutions.

Amazon told CNN that in 2018, its teams used proprietary technology and manual reviewers to proactively block more than three billion suspect listings for various forms of abuse, including non-compliance, before they appeared in the store.

Crazy Aaron’s Muderick feels only a legislative change can end the game brands like his are playing against fake listings of infringing and potentially dangerous products.

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