The Shop Safe Act is set to make eCommerce platforms liable for counterfeit products sold on their websites. Learn more below, including the advised best practices that will help minimize liability, and learn how you can assure the validity of devices in real-time.
What Is The Shop Safe Act?
The Shop Safe Act is a bill that aims to limit the sale of certain counterfeit goods on eCommerce platforms. This bipartisan US bill, announced March 2020, may make companies like Amazon liable for inauthentic goods sold on their site.
The Shop Safe Act, full title “Stopping Harmful Offers on Platforms by Screening Against Fakes in E-commerce Act of 2020”, seeks to amend the Trademark Act of 1946 to address more modern developments.
Why The Shop Safe Act Was Proposed – In Brief
The Shop Safe act was proposed for many reasons, including:
- Counterfeits can have limited or no safety testing, therefore, pose a health and safety risk;
- Counterfeiters can easily appear as legitimate on eCommerce platforms;
- Counterfeit sales are increasing; and
- Legal incentives for eCommerce platforms to vet vendors and goods are limited.
What Products And Platforms Will Be Impacted?
The Shop Safe Act targets counterfeit products that pose a health and safety risk. The proposed legislation impacts inauthentic goods that “can lead to illness, disease, injury, serious adverse event, allergic reaction, or death” if produced without appropriate compliance. The scope of products impacted is clearly large. Examples of goods impacted include counterfeit pharmaceuticals, cosmetics, health products, car seats, batteries and cellphone adapters.
eCommerce / electronic commerce platforms may be held legally liable for counterfeit products sold on their website to US customers. To be more specific about the platforms impacted, as noted in the bill:
“The term ‘electronic commerce platform’ means any electronically accessed platform that includes publicly interactive features that allow for arranging the sale, purchase, payment, or shipping of goods, or that enables a person other than an operator of such platform to sell or offer to sell physical goods to consumers located in the United States.”
Source: Shop Safe Act.
This burden will not come as a surprise to platforms like Wallmart.com and Amazon. eCommerce platforms have come under added pressure in recent years to tackle the counterfeit issue on their websites. Amazon has already introduced “Project Zero” which better enables brands to tackle counterfeits of their products on the platform. And more recently, Amazon also established a Counterfeit Crimes Unit, which seeks to prevent and hold counterfeiters accountable.
eCommerce Platform Requirements – Shop Safe Act Best Practices
According to The SHOP SAFE Act of 2020 (“One Pager”), “in exchange for following SHOP SAFE’s best practices, online platforms benefit from being immunized from contributory liability for trademark infringement.”
But what are the Shop Safe Act best practices? The section-by-section analysis of the Shop Safe Act, available on judiciary.house.gov, notes the best practices as follows.
The “best practices” the platforms must adopt are:
Verifying the seller’s identity, location, and contact information (§ 1114(A)(ii)(I)).
Requiring the seller to verify and attest that its goods are not counterfeit (§ 1114(A)(ii)(II)).
Conditioning the seller’s use of the platform on agreeing not to sell counterfeits and consenting to being sued in U.S. court (§ 1114(A)(ii)(III)).
Displaying the seller’s identity, location, and contact information; where the goods are made; and from where the goods will be shipped (§ 1114(A)(ii)(IV)).
Requiring sellers to use images that accurately depict the actual goods offered for sale and that the seller owns or has permission to use (§ 1114(A)(ii)(V)).
Using technology to screen for counterfeits before a seller’s goods appear on the platform (§ 1114(A)(ii)(VI)).
Implementing a timely takedown process for removing listings for counterfeit goods (§ 1114(A)(ii)(VII)).
Terminating sellers that have listed or sold counterfeit goods three times (§ 1114(A)(ii)(VIII)).
Screening sellers to prevent terminated sellers from rejoining or remaining on the platform under a different alias or storefront (§ 1114(A)(ii)(IX)).
Sharing an infringing seller’s information with law enforcement and, upon request, the owner of the registered trademark (§ 1114(A)(ii)(X)).
Source: Shop Safe Act.
Shop Safe Act and Counterfeit Mobile Devices
Currently, it is not clear (at least to me) that counterfeit mobile devices fall within the scope of this bill.
Obligatory legal disclaimer: this content is intended for general information purposes only and is not intended as legal advice.
However, the press release announcing the bill highlights batteries and chargers as being “potentially life-threatening counterfeits currently sold online.” So, with just this in mind it wouldn’t be unreasonable to think that counterfeit mobile devices are within scope of this bill.
There are even more risks that counterfeit mobile devices pose. These devices can come preinstalled with malware, spyware, keyloggers, etc. While it doesn’t appear to be specifically noted, it does appear likely that counterfeit mobile devices fall within the scope of this bill.
Assure The Validity Of Mobile Devices For Re-Sale
Millions of mobile devices are sold every day via a large range of online shopping platforms without any way to assure the validity of the devices for sale. DeviceAssure provides a quick and easy way to do this.
DeviceAssure is an embeddable library for native apps and websites that examines unique device identifiers & characteristics (hardware profile, CPU, GPU, screen capabilities, UA string and TAC), and compares them against known good configurations stored in DeviceAtlas. This allows for a highly accurate determination of a device’s authenticity.
Whether leveraged by platforms themselves or by their third-party vendors, DeviceAssure can be a valuable, real-time device authentication asset that helps eCommerce platforms demonstrate compliance with key Shop Safe Act best practices.
Learn more about DeviceAssure, get in touch here.