The Six Key Limitations of Amazon Project Zero

Amazon recently announced ‘Project Zero’, a new initiative that it hopes will help counteract one of its biggest criticisms: the sale of counterfeit goods on its marketplace. But will clear limitations prevent many brands from taking advantage?

Unveiled just weeks after Amazon warned investors for the first time in its annual report about the risk of fake goods to its profits, platform, and reputation¹, Project Zero is the ecommerce giant’s latest anti-counterfeiting initiative. It aims to supplement the platform’s existing Brand Registry and Brand Transparency programs and is available by invitation-only to companies that have already enrolled in Brand Registry. Recently, we broke down the initiative and listed how our online brand protection technology, supplements it to help ensure infringements are removed in quick-time.

However, this week we look at how, despite its workable state, Project Zero lays bare some of the persistent flaws in Amazon’s approach to infringement on its platforms.

Limitations

The initiative combines three tools: automated protections, a self-service counterfeit removal tool, and product serialization codes as an attempt to drive down the number of counterfeit goods available on its marketplace.

Previous efforts by Amazon to stop the flood of fake goods, such as the ‘Brand Registry’² program launched in 2017, have proven to be ineffective for many brands, with some going as far to say that they merely pay lip service to the problem. Although Project Zero in theory is a good sign of progress, there are constraints to Amazon’s approach and questions remain surrounding where accountability should lie. Below are the six key limitations that we have identified to the initiative in its current form.

Brands retain responsibility for removing counterfeits

Whilst self-service counterfeit removal is seen as a welcome change, the platform may be absolving itself of responsibility for the majority of counterfeit enforcement. Brands are expected to actively monitor the platform for infringements with the enforcement burden now on them. In theory, Amazon could now take a more hands-off approach and simply point brands to the anti-counterfeiting tools they can use.

Self-service removal data also feeds into the automated protection tool and will likely require significant enforcement input from the brand to ensure Amazon gets takedowns right.

Brands without trademarks cannot register

Enrollment to Project Zero is invitation-only to brands currently signed-up to Amazon’s Brand Registry. This limits the scope of the program, as brands without trademarks cannot register for Brand Registry. Those that rely on design rights or patents when enforcing against infringements are shut-out of Amazon Brand Registry.

Only targets counterfeiting

Project Zero is an anti-counterfeiting program first and foremost rather than a brand protection solution. It is not designed to assist with the full spectrum of intellectual property issues on Amazon, including trademark misuse in competitors’ listings. The enforcement tool is not to be used by brand owners to manage other third-party seller activity, even if that activity is unlawful.

Flawed ASIN system

Project Zero is focused on helping brands manage counterfeit sellers who sell under brand owner Amazon Standard Identification Numbers (ASINs) and share the same product listing page. The tools are not helpful in detecting counterfeit infringers who set up separate ASINs that seek to “private label” counterfeit products without explicit reference to your trademarks.

Lack of prioritization

Amazon’s tools lack prioritization to determine which sellers are the most prolific or possess the most stock, offer no way of linking connected sellers to determine if they are operating together, and provide no means of “whitelisting” your own legitimate products under the ASIN. The process is time consuming because it is very hard to filter out what you want to enforce upon, so everything has to be reviewed in turn.

Brands pay for serialization

For smaller brands with fewer products, particularly products that are new to market and with high individual unit prices, serialization could be beneficial. But for larger brands that have historically sold through multiple outlets or those that offer lower-priced products, the advantages remain unclear. On top of the US$0.01 – $0.05 that Amazon charges per unit, brands will also have to alter their manufacturing processes, bearing a further cost.

Areas of improvement

Depending on the success of Project Zero, there are other initiatives Amazon could investigate, such as seller transparency and accountability. It is currently too easy for counterfeiters to create new seller accounts and hijack top-selling products; bad actors need only an email, phone number, address, credit card, ID, business name and bank account³.

In contrast, platforms such as Alibaba force sellers to provide much more information and make that information available to consumers so that they can determine whether the seller ought to be trusted. However, even detailed seller information is only part of the jigsaw that allows effective enforcement and lasting impact.

Increasing transparency about the identity of sellers and forcing them to provide additional information about their product offerings would protect the consumer and allow brand owners to more effectively manage infringement on Amazon.

Combine with an intelligence-based solution

The Project Zero functionality is best used as part of a comprehensive brand protection strategy that targets multiple platforms and regions to take down the largest and highest priority criminal enterprises. Without wider insight and further collaboration, the Amazon tools will always have their limitations.

Automated, AI-enhanced brand protection technology ensures that brands can prioritize the top offenders. By automating the enforcement process, brand owners can save time and achieve lasting impact against infringers. Using Amazon’s tools in combination with smart automation is the best way to make a real difference.

If you would like to find out more about how Corsearch’s technology integrates with Amazon’s anti-counterfeiting tools and allows you to monitor all forms of infringements on its marketplaces, please get in touch with one of our experts.

References

1. Amazon warned investors for the first time in its annual report about the risk of fake goods to its profits, platform and reputation
   https://www.totalbusinessmagazine.com/2019/02/is-amazon-under-threat-from-retail-pirates
2. Amazon to expand counterfeit removal program in overture to sellers https://www.reuters.com/article/us-amazon-com-counterfeit-idUSKBN16S2EU
3. The simple process for listing products on Amazon aids counterfeiting https://www.wsj.com/articles/on-amazon-fake-products-plague-smaller-brands-1532001601