Shop Safe Advocates Continue to Push, Bring Counterfeit Goods to House Lobbying Effort

Dozens of congressional staffers visited the tables on Sept. 25, seeing the subtle differences between counterfeit airbags and real airbags, cell phone chargers and lotions and makeup.

Jennifer Hanks, senior director of brand protection for the American Apparel and Footwear Association, said the advocates for the Shop Safe bill -- which was first introduced in 2020 -- had a lot of conversations with staffers, about how it's easier for e-commerce platforms to see which sellers are offering fakes than it is for consumers looking at pictures online. "There's more that can be done with those who hold the data and the information," Hanks said.

While Shop Safe has passed the House before, it didn't survive the conference committee process as the two chambers worked out a China package, while the Inform Consumers Act did.

It has its advocates (see 2310030071) in both chambers, and House sponsor Rep. Darrell Issa, R-Calif., who had been disappointed it didn't get a hearing in the Judiciary Committee this year (see 2407230053), spoke to the group.

Shop Safe stands for Stopping Harmful Offers on Platforms by Screening Against Fakes in E-Commerce.

Hanks acknowledged that the likelihood of Shop Safe passing Congress during the month they will be back in session at the end of the year isn't high, given that they will need to hammer out an agreement on funding the government and other must-do authorizations. The Inform Consumers Act did make it onto one of the past spending omnibuses, however, so, she said, "Never say never." The effort to pass Shop Safe is bipartisan.

"We've been on the Hill as a group every month on this issue," she said, adding that they are committed to doing "whatever we need to do to get it done."

Shabbir Safdar, executive director of the Partnership for Safe Medicines, showed how non-sterile needles and counterfeit diabetes strips were sold online; so was a vial of water that purported to be the active ingredient in Ozempic, one of the new injectable weight-loss drugs.

Safdar said Etsy, a marketplace known best for handicrafts, has listings for precursors for illegal drugs as well as weight-loss drugs, all of which violate its terms of use. "We implore Etsy to enforce their TOU in a manner that is consistent and timely," the group's handout said.

Safdar said that sellers list the drugs as "for research purposes only," since Etsy does not allow the sale of drugs in its terms of use.

Safdar said many counterfeit medicines are imported in the small package environment, but he does not think CBP can stop the flow through inspecting de minimis goods. "They inspect way less than 1%," he said.

The best way to prevent sales of dangerous or ineffective drugs would be to only allow websites that have a board of pharmacy license to sell them, he said -- that's only 4% of online sales.

But Safdar said his group does think Shop Safe could help.

Homeland Security's Intellectual Property Center also shared facts with staffers, including the fact that Homeland Security Investigations seized $1.1 billion in counterfeit and illicit goods, such as goods that violate the Lacey Act.

Heidi King, who works in government relations for the Association of Home Appliance Manufacturers, said she thinks more members of Congress are realizing that Inform Consumers, which requires high-volume sellers to verify their identity to platforms, and requires platforms to set up hotlines to report suspected counterfeits, didn't do enough to curb counterfeit sales online. That bill passed in late 2022. King said Inform Consumers was never meant to be the sole solution; it was meant to be paired with Shop Safe.

Sen. Chris Coons, D-Del., in his summary of the Shop Safe bill, notes that in-person retailers are liable for the sale of counterfeit products, but platforms that host third-party sellers are not. He said the bill "takes a balanced approach. When platforms follow the best practices in the bill, they have a safe harbor from liability for third-party seller counterfeit listings."

Hanks said e-commerce platform companies claim they are accessible and responsive to notice of take-down requests from brands, but they lobby against the Shop Safe bill. She asked rhetorically: "If they're already doing it, what's the problem with supporting something they're already doing?"