Amazon fined in Japan over counterfeit product sales

ISTANBUL

A Japanese court on Friday fined the Japanese unit of Amazon 35 million yen (approximately $244,000) for enabling the sale of counterfeit products on its platform, in a landmark ruling that reinforces the responsibilities of online marketplaces to protect sellers and consumers.

The Tokyo District Court found Amazon Japan liable for not taking sufficient action to prevent the sale of fake pulse oximeters -- medical devices used to measure blood oxygen levels -- even after being notified of the issue. The court said Amazon failed to remove counterfeit listings in 2021 despite being aware they were fake, a decision that ultimately impacted the sales of genuine items.

The lawsuit was filed by Try and E Co., the medical equipment manufacturer, and Excel Plan Co., its distributor. While the plaintiffs had sought 280 million yen in damages, the court only awarded compensation to Excel Plan.

Counterfeit versions of the pulse oximeters were sold on Amazon’s platform at prices about 10% lower than the authentic ones, affecting the genuine product’s visibility in Amazon's algorithm-driven search results, which favor lower prices. The lawsuit claimed that when Excel Plan reported the issue and requested Amazon's intervention, the genuine listing was removed instead of the counterfeit versions.

"The ruling was a landmark in terms of acknowledging the obligation to build an appropriate (authentication) system, as businesses practically have no other option but to use platforms such as that of Amazon," said a lawyer representing the plaintiffs.