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Pallone to E-Commerce Companies: What Are You Doing to Stop Dangerous Counterfeit Products?

Mar 7, 2018
Press Release
Requests Briefing From Five Companies Following Troubling Report from GAO

Energy and Commerce Ranking Member Frank Pallone, Jr. (D-NJ) sent letters to the CEOs of five major e-commerce companies today requesting information on the companies’ efforts to address the sale of counterfeit products on their platforms.  Pallone’s letters to Amazon, eBay, Newegg, Sears Marketplace, and Walmart follow a troubling Governmental Accountability Office (GAO) report documenting the ease with which federal investigators were able to purchase counterfeit products through the popular online platforms.  The letters were sent ahead of today’s Energy and Commerce Subcommittee hearing on emerging tech’s impact on retail operations and logistics.

“I am troubled by a recent report by the GAO showing that federal investigators were able to purchase potentially dangerous counterfeit products through popular online platforms,” Pallone wrote in his letters to the e-commerce companies.  “Counterfeit products, such as fake cosmetics and electronics, can cause serious harm to consumers and endanger public health.” 

The GAO report notes that federal investigators purchased a sample of trademarked consumer products, including cosmetics and phone chargers, from third-party sellers on Amazon.com, eBay.com, Newegg.com, Sears Marketplace, and Walmart.com. GAO determined that 20 of the 47 products in the sample – and all of the cosmetics – were counterfeit, which may pose risks to the health and safety of consumers. The report notes that “counterfeit cosmetics have been found to contain hazardous substances, including cyanide, arsenic, mercury, lead, urine, and rat droppings.”

“This finding demonstrates yet another disturbing way consumers could unknowingly buy harmful products in commerce, and is consistent with the Food and Drug Administration’s evidence of the high number of violations associated with cosmetic imports, including the use of banned cosmetic ingredients, microbial contamination, illegal color additives, and high levels of mercury or heavy metals,” Pallone continued in his letters to the e-commerce companies.  “I would like to better understand what measures your company is taking to prevent the sale of counterfeit products on your platform.”

Pallone has long advocated for greater transparency in the cosmetic and personal care product industry and released draft legislation in 2016 that would give FDA greater authority over cosmetics and personal care products. He is pushing to have cosmetic legislation included in a bill that the Committee is currently working on to increase regulation of over-the-counter drugs. 

Pallone is requesting a briefing from each of the companies to better understand what actions are being taken to prevent the sale of counterfeit products.  Pallone is seeking answers to a series of questions, including:

  • What measures does each company take to vet third-party sellers on its platform?
  • How does each company block and remove counterfeit products?
  • What kinds of interactions does each company have with product manufacturers and law enforcement to address counterfeit issues? 

Pallone’s letters are available HERE.

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