The Buy Safe America Coalition recently sent the letter below to US Rep. Cathy McMorris Rodgers (R-WA) in response to the BIG TECH AND CHINA pillar that was added to the “Big Tech Accountability Platform.”
The Honorable Cathy McMorris Rodgers
Committee on Energy and Commerce
Washington, DC 20515
Dear Republican Leader McMorris Rodgers:
The members of the Buy Safe America Coalition applaud the updated “Big Tech Accountability Platform’s” NEW PILLAR: BIG TECH AND CHINA. Our Coalition looks forward to working with you and the rest of the Energy and Commerce Committee’s (“Committee”) members to address the concepts outlined in the previous memo and the new pillar’s recognition that “Big Tech companies must do more to address the sale of counterfeit goods coming from China” and “the need to explore online marketplaces’ policies and practices for addressing counterfeit goods, including any additional scrutiny applied to sellers based in China.”
The Buy Safe America Coalition consists of a diverse group of responsible retailers, consumer groups, manufacturers, intellectual property advocates, and law enforcement officials who support efforts at all levels of government to protect consumers and communities from the sale of counterfeit and stolen goods. This diverse group of members represents automakers, toy manufacturers, wholesaler-distributors, shopping centers, pharmacies and retailers in the home improvement, apparel, footwear, power tools, sporting goods, and beauty and health industries, to name a few.
The sale of counterfeit goods is a problem that is presently growing unchecked, especially with a newfound surge in China-based e-commerce sellers. The problem is widespread, impacting every community and virtually every retail category. There are countless published accounts of faulty and defective infant car seats, strollers, bike helmets, car brake pads, air bags and toys that have injured a child, parent, or family member. In recent months government officials have caught scam artists peddling knockoff personal protective equipment (PPE) and fake vaccine cards.
We cannot begin to tackle this flood of counterfeit goods confronting consumers without acknowledging the explosive growth of online marketplaces in the past decade, and the anonymity they have provided criminal elements and con artists to sell illicit products. According to a Wall Street Journal article, “a new product listing is uploaded to Amazon every 1/50th of a second, according to slides its officials showed at a 2019 December conference in the industrial port city of Ningbo.” Amazon’s marketplace now makes up more than half of their retail sales. While Amazon is obviously the largest, it’s not the only marketplace operating in the United States where illicit goods are sold. A Wall Street analyst “warned that as many as 2 million items for sale on Etsy – about 5% of all the goods on the site – could be counterfeit or violate trademark laws. Criminals also took advantage of the pandemic, selling hundreds of counterfeit face masks that popped up on Etsy and other marketplaces.
These criminal networks are taking advantage of the rapid escalation of online shopping to peddle counterfeit, stolen, defective, harmful, and dangerous products to unsuspecting consumers. According to a January 2020 report by the Department of Homeland Security, the annual cost of counterfeit and pirated goods being sold in the U.S. is over $500 billion, with 90 percent of seized products in 2018 arriving from mainland China and Hong Kong.
And the impact of counterfeit goods extends far beyond what meets the eye. Many of the issues outlined in your earlier Committee memo – including illegal drug sales, child exploitation, and terrorism – were found to be connected to criminal networks selling counterfeit and stolen goods in the 2020 DHS report.
We continue to be encouraged by your call for members to work across the aisle to find solutions and make meaningful changes to problems that pose risks to our families, communities, and workers. This includes empowering the Federal Trade Commission to take actions when protections have been violated. As such, we urge you to work with Rep. Schakowsky to bring much needed transparency and accountability to online marketplaces though the Integrity, Notification, and Fairness in Online Retail Marketplaces for Consumers (INFORM) Act – a common-sense, bipartisan solution to a growing American safety and economic threat. By shining a light on the lack of verification and transparency of third-party sellers on these platforms, you can help deter fraudsters from using them to prop up nefarious activities.
Again, we applaud your recent updated memo outlining key legislative concepts for your “Big Tech Accountability Platform,” especially those related to the growing threat of counterfeit products from China. We look forward to working directly with you, your staff, and every member of the Committee to prioritize vital consumer protection measures to online marketplaces.
Spokesperson for Buy Safe America Coalition