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The high price of fraudulent products

The Internet has forever changed the way retail companies do business. Online marketplaces and plug-and-play website creation sites make it simple for any layperson to open an ecommerce business. These platforms allow businesses to reach customers that they would not otherwise have the power to reach.

Unfortunately, these same tools also pave the way for fraudulent businesses to step in and compete. Amazon is the first large, online retailer to take a legal stand against this source of unfair business competition. And not everyone is happy about it, including the legitimate retailers.

In early November, Amazon filed a lawsuit against two companies that had registered as independent retailers with the ecommerce giant. Amazon was responding to concerns and complaints voiced by legitimate sellers who said that these counterfeit products, sold at a significantly lower cost than the legitimate ones, were damaging their sales and putting their consumers at risk. Amazon hopes that by taking action, it will deter future fraudulent companies.

Mark Lopreiato, founder of Forearm Forklift, and one of the vendors who had suffered from the counterfeit companies, thinks it’s all a worthless PR stunt. He points out that even if the businesses named in the lawsuit are forced to shut down, there are plenty of other companies selling illegal knockoffs. His preference would be that Amazon work with the legal sellers to systematically remove the fraudulent ones.

The Internet has allowed small business owners to grow and thrive. Unfortunately, it has also made it easier for fraudulent companies to do the same. If the fraudulent product is circulating and undermining your business, reputation, and good name, there is no reason to wait for a third party to take action. You have the right to seek counsel from a lawyer who specializes in business litigation and who can advise you of your rights, and help you determine the best action to take to protect your business.