An Amazon seller was sentenced to prison 7 weeks ago in part for "ginning up" false allegations about competitors. The
government alleged that one competitor was suspended from the Amazon Marketplace because of a false intellectual property (IP) complaint filed by the defendant and his coconspirators in what's known as the Amazon bribery case.
That makes this week's news of Amazon's civil lawsuits against bad actors whom it alleged filed false IP complaints against its sellers (known as false takedowns) even more notable.
In a
press release announcing the actions, Amazon said the multiple bad actors had submitted thousands of false copyright infringement claims against Amazon's selling partners in an effort to have those sellers and their products removed from the Amazon store. "These false claims attempted to reduce customer choice, harm Amazon's selling partners, and damage the integrity of Amazon's store."
Amazon alleged that defendants first registered with its Brand Registry and then created fake, disposable websites, with product images scraped from the Amazon store, to use as false evidence when making thousands of claims that selling partners were violating their copyrights. Amazon noted that 700,000 brands are currently enrolled in Brand Registry.
"Bad actors may use this tactic as a way of attacking and fraudulently suppressing or altering listings for competitors' products so that consumers are more likely to buy the same products from the bad actors or their affiliates," Amazon wrote in its complaint.
In one lawsuit, Amazon alleged the defendant engaged a China-based organization to register trademarks in the US, a company that was sanctioned by the Commissioner of Trademarks for allegedly filing over 15,800 trademark applications using false, fictitious, or fraudulent domicile information and/or credentials.
Amazon alleged the defendant used a trademark application that the USPTO had terminated to gain entry to Amazon Brand Registry in 2021, and once approved, proceeded to launch "a broad campaign of 3,850 takedown requests" that claimed specified images in sellers' product listings infringed its copyrighted images.
The problem of false takedowns is not isolated to the Amazon marketplace. In Etsy's Transparency report released last year, it provided some insight into legitimate and illegitimate takedowns, reporting a 129% increase in the number of total intellectual property takedowns in 2021 compared to 2020. And,
Etsy reported, "We rejected 18% of intellectual property takedown notices due to insufficient information, incorrect information, or other noncompliance under Etsy's policies, a 20% increase over 2020, indicative of our increased focus on preventing fraudulent and abusive takedown notices."
Ever since eBay launched its VeRO program in 1998, sellers have been using IP takedowns to protect their own intellectual property rights. But they have also had to battle fraudulent IP takedowns as well as overreaching reports filed by legitimate brands.
Sellers discussed the news of the four Amazon lawsuits
on LinkedIn. One consultant wrote, "The weaponization of Amazon's often well intentioned policies is a standard goto for black hat players and terrrible for the industry. They teach the strategies in seminars in the light of day. I wish Amazon would do more, but alas at least doing something is better than nothing."
Amazon is charging the defendants with the following counts: Misrepresentation of Copyright Infringement; Breach Of Contract; Tortious Interference with Contractual Relationship; and Fraud.
What Amazon did not address: the fate of victims - sellers who were suspended from its marketplace or otherwise negatively impacted by false takedowns. It would be interesting to learn if Amazon has investigated that angle of the fraudulent activity.
The AuctionBytes Blog has been giving a voice to online merchants since its launch in 2005. Named one of the world's top 30 blogs in 2008 by "Blogging Heroes." Weigh in with your thoughts on the joys and pitfalls of selling online.
Amazon Sues Sellers for Filing False Takedowns against Rivals
by: Ric 
by: COVID-19 