Counterfeiting

What Amazon Project Zero Could Mean for Brands and Sellers

Today, Amazon announced its newest anti-counterfeiting program to “help drive counterfeits to zero.” This looks to be a lighter weight version of the Amazon Transparency program launched in 2017.

For product lines that are enrolled in the Transparency program, products must be labeled with a Transparency code in order for them to be listed on Amazon. Project Zero does not seem to prevent sellers from listing products for sale but rather makes it easier for brands to remove already existing offers from the platform.Transparency received criticism from some brands because of the per-unit cost and the visibility that it gave Amazon into brand supply chains. Project Zero is only open to brands that have a US trademark registered with Amazon’s Brand Registry program. 

Key takeaways:

  • Amazon has promised that brands that make even a small number of false counterfeit reports will be kicked out of the program

  • This program will enable faster and more proactive removals of offers

  • Project Zero will involve less human judgment and will rely more on machine learning and other automation technologies to remove offers

  • A low-cost (between $0.01-$0.05 per unit) product serialization service will be offered by Amazon in conjunction with the launch of this program

While the prospect of immediate removals of offers suspected of being counterfeit might be concerning to long-term sellers who have been hit by false and defamatory counterfeit complaints against them, the fine print on the Project Zero website has good news for both brands, sellers, and sellers who own brands.

How the counterfeit reporting system will change

Unlike the way the counterfeit reporting system on Amazon has worked historically, the Project Zero FAQ page promises that:

“Brands must maintain a high bar for accuracy in order to maintain their Project Zero privileges. We have a number of processes in place to promote accuracy, including required training as part of Project Zero enrollment and ongoing monitoring to prevent misuse of our tools.”

While we can’t predict the future, we suspect that this means that the legacy counterfeit reporting system will eventually be phased out as it has been widely abused for the purpose of making fraudulent claims against sellers with the intent of restricting competition while making it possible to charge higher prices to customers.

What this might mean is that Amazon will expect brands to clean up their acts while also making it more challenging for sellers of counterfeit products to sneak in under the radar.

Project Zero vs. Amazon Transparency

Transparency requires that sellers apply Amazon’s proprietary Transparency QR codes to products that could also be scanned by customers using the Transparency smartphone app. Project Zero looks to be taking a different tack by merely having product serialization as an option. The FAQ page implies that brands that have existing product serialization will be able to opt-in to the program without having Amazon serialize the products. It would probably be a hard sell to companies who already have a serialization scheme to also use Amazon’s redundant serialization in order to be able to access a more effective counterfeit reporting system.

The FAQ states that brands will not need to serialize products to access Project Zero, but that “the brands that serialize their products are seeing the best results. Product serialization is a powerful tool for detecting and stopping counterfeits from reaching customers.”

Will this change anything?

We would speculate that the lukewarm reception from some brands to the Transparency program informed this refined and more broadly accessible approach which is intended to address the concerns of both sellers and brands alike about how Amazon handles counterfeit policing. This also places more of an onus on Amazon’s systems to be effective, to avoid false-positives, and to reduce abuse of the counterfeit reporting system which has long been rife on the marketplace.

This is also a positive step in terms of giving brands a reputation system within Amazon itself. Brands that abuse the system will hopefully be kicked out of it quickly. Brands that make accurate reports will gain a trusted status that enables them to get faster service on the reports.

One slightly disingenuous part of the announcement states that brands will instead use a “self-service tool” to flag counterfeits instead of needing to contact Amazon. Brands currently need to use a self-service mechanism to contact Amazon to take down counterfeits. The new system will be another self-service tool that contacts Amazon for you.

Despite this, it looks like this program is more than just a fresh coat of paint over the existing system. Amazon is attempting to address the problems that all sides of the marketplace have had with the counterfeit policing system. We’ll see if it makes a difference in the coming years.