Counterfeit-Busting SHOP SAFE Act Heads to Congress
After four years in limbo, the SHOP SAFE Act—which aims to tackle the rampant sale of counterfeit goods online—has advanced to the U.S. House of Representatives.
The Stopping Harmful Offers on Platforms by Screening Against Fakes in E-Commerce Act (SHOP SAFE), first introduced in 2020, aims to incentivize online platforms to engage in best practices for vetting sellers and products and stem the flow of illicit products by repeat online offenders. The bill would also arm consumers with more information about the origins of their purchases.
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The proposal is finally making its way to Congress under by way of the House Judiciary Committee Subcommittee on Courts, Intellectual Property, and the Internet Chair Darrell Issa (R-Calif.) and House Judiciary Committee Ranking Member Jerry Nadler (D-N.Y.).
The bill is a companion to legislation re-introduced in the U.S. Senate by U.S. Senators Chris Coons (D-Del.) and Thom Tillis (R-N.C.) in 2023. It would support the Integrity, Notification and Fairness in Online Retail Marketplaces for Consumers Act, or INFORM Consumers Act, introduced Sens. Dick Durbin (D-Il.) and Bill Cassidy (R-La.) and passed last year. That piece of legislation modernized consumer protection laws by compelling online marketplaces to collect—and verify—basic business information from third-party sellers before they can make sales.
Under the SHOP SAFE Act, e-commerce sites that allow vendors to peddle counterfeits would be held liable for failing to do their due diligence. The law would also put the onus on brands to provide marketplaces with advance notice about trademarks, as well as other identifying product information and an internal point of contact, to help identify fakes before they make their way to shoppers.
On Thursday, the American Apparel and Footwear Association (AAFA) penned an open letter to Reps. Issa and Nadler in support of the bill’s swift passage. The missive, signed by more than a dozen industry trade associations, from the Footwear Distributers and Retailers of America (FDRA) to the Halloween & Costume Association (HCA), Alliance for Automotive Innovation (AAI), the Toy Association, the Personal Care Products Council and the Transnational Alliance to Combat Illicit Trade (TRACIT), elucidated the dangers of counterfeit products, from heath and safety impacts to ramifications for U.S. industry and domestic jobs.
The signatories cited data from the Center for Anti-Counterfeiting and Product Protection at Michigan State University, which revealed that 68 percent of consumers were conned into purchasing dupes in 2022, with products like clothing, footwear, toys, pharmaceuticals and car parts among the most commonly counterfeited. Fakes aren’t just an issue for consumers; they are often produced through unregulated supply chains that put worker rights at risk.
“Overwhelmingly, the very brands who are victimized by the trafficking of counterfeit goods bear the costs of combatting counterfeiters,” the letter said. “This disproportionately affects small businesses that do not have the time or the resources to address the problem at the scale it is today; consistent proactive work is a must to protect consumers.”
According to AAFA CEO and president Steve Lamar, “It is far too easy to buy counterfeits across platforms,” but the SHOP SAFE Act has the potential to “ensure platforms consistently partner with brands to help keep counterfeits from being posted online for a consumer to purchase.
“Of course, authentic brands will continue to play a key role in supporting the efforts of platforms—just as they do now—but we need the commitment and collaboration of platforms to counter the growth of counterfeits that put Americans at risk,” he added. “One counterfeit is one too many.”
AAFA senior director of brand protection Jennifer Hanks called consumer safety “a bipartisan issue, noting, “Every Member of Congress represents constituents who have unknowingly purchased and/or been harmed by counterfeits.”
“It is time to get the SHOP SAFE Act over the finish line,” she said.
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