American Eagle Sues Amazon Over Counterfeits on Its Marketplace

American Eagle Sues Amazon: Key Insights

• Alleged Knockoffs: American Eagle claims in its lawsuit against Amazon that the eCommerce giant has not done enough to prevent the sale of counterfeit products of its Aerie clothing line. Google searches show consumers the cheaper dupes, luring them away from the originals.

• One Incident in a Series of Events: Counterfeiting on Amazon and all other major eCommerce marketplaces is a growing concern among retailers who fear losing market share to inferior duplicates.

The counterfeiting battle on Amazon continues. Now American Eagle Outfitters is suing Amazon for trademark infringement, alleging that duplicates of the American Eagle Aerie collection are being sold by third-party sellers on Amazon. 

American Eagle filed the complaint earlier this week in the U.S. District Court for the Southern District of New York. The lawsuit blames Amazon for hosting counterfeit Aerie and Offline by Aerie branded apparel on its site, despite the fact that American Eagle has not authorized Amazon to act as a reseller of its branded products.

Amazon’s Reach Is a Double-Edged Sword

Amazon’s ubiquity poses a problem for retailers that do not have the same organic presence on Google. When consumers look for Aerie products on a search engine, an Amazon site will offer knockoff products at lower prices than the original, which consumers typically choose. This obviously takes significant market share away from the trademarked brand. 

This is not the first time Amazon has been accused of enabling the distribution of counterfeit products on its marketplace. The Consumer Product Safety Commission (CPSC) has held Amazon responsible for third-party products on its eCommerce site. Amazon planned to appeal the ruling.

Amazon is the most popular eCommerce marketplace for consumers in the U.S., Europe, and other regions of the world. In 2023, the marketplace hosted sales of US$729 billion worth of products. 

Many of the third-party sellers are based in China, where production costs are low and copyright restrictions are less stringent. U.S. Customs and Border Protection is being overwhelmed by the flood of dupes entering the country. They detect billions of dollars worth of products, but much of the counterfeiting still goes unnoticed.

American Eagle said in its lawsuit that it alerted Amazon to the counterfeits. However, it found that the products were simply relabeled with a different spelling, but not removed. 

American Eagle is not alone in its complains to the eCommerce giant. Birkenstock and Daimler also complained about counterfeits of their products on the site, which Amazon responded to with its own anti-counterfeiting team, but the sheer volume of product listings makes it nearly impossible to thoroughly investigate each one. 

Given the CPSC’s ruling regarding Amazon’s liability for counterfeits, it is likely that Amazon will have to answer for the knockoffs on its marketplace. 

Sources: CNBC