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tv   Experts Testify on Online Marketplace Fraud  CSPAN  November 5, 2021 10:32am-11:19am EDT

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eastern on "in depth" and before the program should visit c-spanshop.org to get your copies of his books. >> c-span edger unfiltered view of government. we are funded by these television companies and more including midco. groups testified about online marketplace fraud. including the rise of organized retail crime to online trade market counterfeiting. the senate judiciary committee held the hearing. it's about an hour and a half.
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[inaudible conversations] [inaudible conversations] [inaudible conversations] [inaudible conversations] [inaudible conversations] [inaudible conversations]
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[inaudible conversations] [inaudible conversations] >> bearing will come to order. -- the challenge of stolen counterfeit and sick products sold to unsuspecting customers online. i wouldld like to start by showg a brief video that highlights this issue. >> the rise of e-commerce has fueled counterfeiting around the world come some estimate the sale of illicitme products could
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result in w more than 5.4 5n net job losses worldwide by 2022. >> u.s. businesses are going out of business because of counterfeit goods. >> consumer products and pharmaceuticals make up a breach of counterfeit goods. these are especially dangerous because they post health and safety risk. online marketplaces allow criminals to sell items quickly and anonymously. >> this is an organized business that will take advantage of consumer. >> what we've seen is a shift over to e-commerce. >> confiscated power tools for sale on facebook. a game of whack-a-mole. you fix it you but they somewhere else. >> in the online space is weakened by counterfeit unregulated and dangerous toys. >> counterfeits pop up on amazon within 30-60 days of us launching a tv commercial. >> the u.s. consumer product safety commission filed an administrative complaint charging some product sold on amazon are defective and pose a risk of serious injury or death.
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>> to the original product and counterfeit side-by-side. >> third-party sellers account for about half of what they are selling themselves. >> a bill is working its way through congress that could potentially help in that regard called the inform consumers act and would require third-party merchants to be vetted by these online marketplaces. >> even simple transparency is something that could make a difference. >> can they ensure consumers that third-party sellers are posting dangers of counterfeit product? >> i been working on this issue since 2008, and enlisted the support of bill cassidy who is been cosponsor of major legislation on the subject but it was then that he met with representatives of home depot who told me about a problem they were facing. there were certain brands of power tools that they sold exclusively at home depot
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stores. there were not supposed be available anywhere else legally but it turned out these tools are being offered for sale new, still in the original box by anonymous sellers on online marketplaces like amazon. it wasn't hardd to figure out what was going on. these tools were being stolen from the original manufacturerar and resold. it wasn't just tools. it happened with all kinds of products as we will hear. cosmetics, electronics, clothes, over the consumer -- over-the-counter drugs, toys, even baby formula, i see some of the table there as an example. third-party sellers were flooded the internet with products stolen and counterfeited. often these products pose serious health and safety risks to customers who thought they were buying theme original product. back in 2008 i introduce my first bill to address the problem of illicit products sold online and the marketplace has told mene don't worry, we are
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taking care of this. you don't need legislation. here we are 13 years later and this problem hasn't gone away. it's gotten much, much worse. when you buy products from third-party sellers on online marketplaces you're really rolling the dice. in 2018 the government accountability office ran a test. they bought a sample of 47 consumer products from third-partyro sellers on leading e-commerce websites to see a meaty just might be counterfeit. out of 47, 20, 20 of the 47 were counterfeit. in january he was trade representative reported quote the rapid growth of e-commerce platforms has helped fuel the growth of counterfeit, pirated goods into a half trillion dollars industry. half trillion. and stolen goods continue to be offered online by sellers who pop up, disappear and pop up again. they lose 45 billion each year in these schemes.
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my staff asked home depot if there's tools are still being offered online as new by third-party sellers. they sent me nine postings that popped up just last week and that was a small sample. here's one of them. a brand of lithium batteries that is only available at home depot being offered for sale in the box by third-party seller on amazon for 20% 20% below thl price. after the fact one investigation is not stopping the problem. we need to take steps to deter shady sellers of using these marketplaces in the first place. consumers do better, deserve better in being deceived into buying sham products. retailers are tired how easy it is forta organize groups to stel the goods and resell them online. manufacturers are sick of seeing knockoffs of the products hawked on sites like amazon. congress needs to do something. that's what we were elected for and there are several principles that should guide us. first if some is going to sell
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large finds a good online in the market place they should tell the marketplace who they are. doesn't say that some pretty basic? the seller should a be verified. second committed product sold online turns out to be a fake or stolen or dangerous, consumers should be able to report it and find the seller and the market place must ensure the seller can't just disappear, pop up later under a p new account nam. third, if the consumer product from one some online and the owner is filled by -- order so by nole the country the market place should inform the consumer. verification, transparency, accountability., no more bait and switch. these are principles we should follow as we work to clean up online marketplaces are i think it is a bipartisan deal as a mentor with senator bill cassidy republican of louisiana that promotes these principles. it's called the inform consumers act. a monitor of his cosponsor senator grassley, senator
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hirono, tunes, tillis, warnick and rubio. i thank them all. in the house articles sponsored by my friend representative jan schakowsky democrat from illinois. she has been a consumer advocate all her life. before she was ever elected to public office she was a mom who was raising l hell about expiration dates being printed on dairy products. we take that for granted now but she was one of the originals in that fight. she joined by republican representative gus bilirakis from florida. her bill has been endorsed by a broad range of consumer groups, retailers, labor and online market places. the day after we announced this hearing amazon endorsed it, too. we've negotiated and worked hard on this bill to achieve consensus and help we can make it law soon. bill law soon. there are others out there. the shop safe act which addresses second --.
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today we'll hear from a distinguished panel of witness who is will talk about the scope of the problem. there is bipartisan support and momentum for addressing it and i hope we get it done. now i turn to my colleague and friend congressman -- senator did i cover ever possible? chuck grassley of iowa. >> thank you for your remarks and thank you for calling this hearing and it is very important that we look into the roles of big tech in this area. americans increasingly rely upon the internet to purchase everything from healthcare products and infant formula to iphone chargers and even automobile parts. unfortunately criminals are using the online platforms to sell counterfeit or stolen items that can be very dangerous to consumers. this hearing will explore the problem. we must stop this activity.
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thanks to the internet, we can now purchase nearly anything from nearly anywhere. companies of all sizes can reach new customers all over the world. in the same way, counterfeiters and other criminals are exploiting online platforms. these activities threaten consumer safety and businesses' bottom line. criminals can easily open online store fronts on ecommerce marketplaces. criminals operate under fake names. and stolen identity. they use false credentials. if a marketplace takes them down, these criminals simply resurface under a different store front identity.
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all the while, their listings look authentic to unsuspecting customers. counterfeit products are usually substandard. and often unsafe. products often don't meet strict safety standards or comply with quality controls. for example, drug traffickers are using social media and other e-commerce platforms to market their products. we've also seen a spike in professional shoplifters of highly valued items to resell online. according to a 2020 survey by the national retail federation, organized retail theft has increased nearly 60% since 2015. brand owners, manufacturers and
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retailers are doing their very best to fight this epidemic. put even our largest companies who can afford to have dedicated staff monitor online don't seem to be able to keep up. small businesses lack the necessary resources to pursue online counterfeiters. law enforcement is also overwhelmed. that is why i introduced s-1159, a bill that was included in the u.s. innovation and competition act so businesses can get more information to shore up the integrity of their supply chain confidence buying online that they do if they went to a mortar and brick store. consumers have to rely on the accuracy of online listings.
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so if a product listing consists of misleading images or fake reviews, it is more likely that the consumer will be then tricked into purchasing a counterfeit or stolen goods. it is clear that voluntary efforts by big tech companies, while a very good first step, are not enough. online companies profit off of every sale on their platform, even if it is counterfeit or stolen. consumers need more accountability and transparency including whose operating online and selling these products. we should promote better screening, more transparent seller information and increase collaboration and data sharing. it is very essential that
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businesses and platforms work with law enforcement to identify criminals selling counterfeits and stolen goods online. congress should consider legislation for consumers from criminal enterprises operating online. none of the proposed solutions is a silver bullet. there needs to be a multi faceted approach to addressing the problem. online shoppers deserve to have confidence that they are getting exactly what they are paying for. and that their purchases are safe and authentic. thank you. >> thank you senator grassley the first witness is aaron muteric.
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he invented thinking putty. his company is known for developing unique production methods to employ individuals with special needs. he's a volunteer firefighter. received his b.s. from university of rochester. gary camel is the is assistant direct for education outreach and senior academic specialist at michigan university center for anti-counterfeiting and product protection. she also serves as an adjunct professor after law at michigan state college of law. intellectual property and trademark law. previously worked for de paul college of law. received her b.a. from university of chicago, her m.a. from american university in
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cairo. and j.d. from de paul. james snowden. association represents global internet on matters of public policy. mr. snowden was chief operating officer at ntca, internet and television --. also served in federal communications commission as chief of consumer and government affairs bureau from william mary. senator whitehouse. >> thank you very much. dvs health is a great growing and successful rhode island company shown leadership in many issues including refusing to
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sell tobacco products as part of its commitment to public health. online marketplaces have been an important part of every day life in the covid shut down but they present convenient avenues for organized theft and crime. mr. dougan is at the vanguard of investigating and combatting these crimes. for decades fought. he's a natural leader in retail loss prevention particularly e-commerce and even featured in the news media as one of the foremost experts in dismantling organized retail crime. he's a veteran of the united states army military police, serves as president of the national coalition of law enforcement and retail. and i'm delighted to have him here. i will say that as u.s. attorney and rhode island attorney general it was my privilege to work with many skilled rhode island investigators both in law enforcement and from the private sector. and mr. dougan continues our
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tradition of investigative excellence in rhode island. >> thank you senator whitehouse. with the witnesses please stand to be sworn in. please raise your right hand. do you affirm the testimony you are about give before the committee will be the truth, the whole truth and nothing but the truth so help you god? all answer in the affirmative. mr. muteric. >> aaron muteric. founder and president of crazy aarons a toy manufacturer in norristown, pennsylvania. thank you for the opportunity to testify today. chairman durbin, ranking member grassley. i applaud your commitment to protecting consumers. curbing the flow of counterfeit and unsafe goods is e-commerce is critically important to me as a toy manufacturer and a small
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business owner. i founded crazy aarons in 1998 with a mission to create toys that inspired a sense of wonder and creativity. i quickly realized i was going to have to build my own factory, so that is what i did. and today our headquarters is part of the revitalization of norristown. we employ over 100 people and for over 18 years we have provided meaningful daily work to hundreds of additional individuals with disabilities in the philadelphia area. while my business has seen successes since the days of experimenting in my parents basement, it has come with unanticipated challenges. i discovered a tidal wave of infringing products being sold online through third party sellers. we've spent significant time and resources policing these one by one. i've submitted a list to the
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committee. today i appreciate the opportunity to share three serious concerns. first, the enormous resources required from a small business to endlessly police these marketplaces for bad actors. second, that due to many of these bad actors being outside the jurisdiction of the united states, our recourse to protect our intellectual property and reclaim damages is severely limited. and in many cases non existent. third and most importantly, these bad actors often sell unsafe goods which do not meet the stringent federal safety standards required of legitimate producers. these violations range from labeling requirement, illegal levels of regulated chemicals and mechanical hazards which cause acute physical harm. consumers visit online marketplaces assuming the products they see meet safety standards. so i created the world's first magnetic putty. it is a putty toy that crawls over to a magnet as if it was a
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live. and it was a tremendous commercial success and differentiated us from competitors. we invested significant r&d into making it a reality and into making it a safe product. as counterfeiters and knockoffs flooded the marketplace, magnetty putty sales began to decline. i scrambled but became increasingly concerned that almost every one of the competing products did not comply with safety standards. today i have brought with me products i purchased last week from two of the largest online marketplaces in the u.s. i also have brought independent third party laboratory results showing their non compliance with mandatory federal standards. our company has done this testing at our own expense and communicated this non compliance to online marketplaces again and again following up with them repeatedly. we have done this for years. nonetheless these products
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remain available for sale. they are purchased in the hundreds of thousands by unsuspecting consumers. they contain high strength hazardous magnets which are not legal in children's products. you will note the online packaging and listings including language like safe for children 3 plus. or safety tested. they include photos of children as young as toddlers playing with them. accidental ingestion of these hazardous magnets can cause serious injury and unfortunately numerous fatalities have been documented. their magnetic strength is so high they destroy themselves when drawn to each other. you can see in the video and photo i have provided that when these magnets collide, that the not only shatter into sharp shards but due to the nature of their material, they will spark and have the capacity to start a fire. if my words, demonstration or
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laboratory results ant enough you need only look at consumer reviews of the products which are publicly available in the marketplaces themselves. an example. quote, the magnet broke apart while i was showing this off to a friend. he was pulling them apart. sliced open his finger. i do not recommend this to anyone. i thank you for the opportunity to share the story of one product monk a sea of millions available online. i appreciate your efforts to secure consumers from counterfeit and unsafe goods. >> and we appreciate your testimony and the fact that your business philosophy is embracing people with disabilities. >> thank you. >> professor, dr. camel, you are next. >> chair durbin, ranking member grassley and members of the committee, thank you for inviting me today. my remarks draw on my research online trademark counterfeiting and work with industry professionals. i focus on research, education
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and outreach around counterfeiting and brand protection. we work with both intellectual property rights coners and governments as well as online marketplace, social media platforms and other industry experts across the field giving us the unique ability to examine the problem wholistically. today i'll give an over view and the current stay of the law. one i --. and two i recommend continued and expanded data sharing and research on the trade in counterfeit goods and counterfeit responses. i'd like to start by painting a picture what is occurring online marketplaces in the current state of the law. the sale of counterfeit goods online impacts national companies, companies of all size, small and medium sized enterprises and consumers is has exploded in the past decade and even more since covid-19. the financial impact of the sale is staggering. roughly over 460 billion dollars
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wort of global sales in 2019. counterfeiters find success by using another company or brand own ears trademark on a product or package without authorization to. they also take advantage of the opportunity online marketplaces to provide to reach often unsuspecting consumer who is cannot examine the goods before purchase. consumers struggle to be able to report suspected counterfeit or cannot find a third party seller. only marketplaces have varying levels of proactive efforts. must be a meeting in time and space of the consumer, counterfeiter posting and commerce platform. the most effective way to disrupt this is removing a factor from the situation proactively before they ever reach that meeting in time and space on the platform. in the brick and mortar space, the current state of law requires providers to take steps to disrupt the sale of counterfeits and consumers.
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however we don't find the same parallels in the law. the current state of law rests on the 2010 second circuit case of tiffany versus ebay. which recommends only need to act if they have specific knowledge of a posting from a --. -- monitoring other platforms for counterfeit even though they have the most control over the platforms they have created. thus where brand owners attempt to take down counterfeits but cannot get at the root of issue. a lack of transparency about third party sellers, details on vetting, taken, repeat sellers or any education awareness or reporting mechanisms for consumers. while informed -- growing urgency on this topic and take different approaches they both seek to require e-commerce platforms to proactively take measures. and provide multiple avenues for tackling this complex issue.
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in my opinion both pieces of legislation are essential to balance the space due to the shift from brick and mortar to the current online e-commerce space. and importantly to provide consumers with more education, protection and avenues which to report suspected counterfeit goods. i also recommend continued and expanded data sharing and research on the trade in counterfeit goods and anti-counterfeiting responses. thank you again for the opportunity to participate in this hearing on this very important issue. and i look forward to answering your questions. >> thank you. >> chairman durbin. ranking member grassley, members of the committee. thank you for the opportunity to appear today to discuss the ways that online platforms are partners in the fight against illegal and counterfeit goods, retail theft and protecting consumers from bad actors online.
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represent -- our mission is foster innovation, promote economic growth and empower people through the free and open internet. online marketplaces and platforms are the virtual main streets that enable us to purchase things we want and need. not all marketplaces are the same. different item, sellers, audiences. and households across america, we use online marketplaces to get our grows for the week and goods and crafts all with the click or swipe on a screen. as we continue to live through the covid-19 pandemic online marketplaces and platforms have helped americans by delivering the essential goods and products consumers need to maintain their daily lives and keep our economy going. while the vast majority of online sellers and goods sold online are legitimate, the internet industry recognizes that online systems have created new challenges for brand owners,
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retailers and consumers. however counterfeiting, retail theft and organized crime are not new problems. nor were they created by online platforms and marketplaces. it would take all of us, law enforcement, state box retail. brands and right holders and online marketplaces to work together to combat the illegal activity by organized crime. online marketplaces have made this a priority and work every day to stop organized crime and counterfeiters. we recognize the responsibility and the important role we play in the ecosystem in stopping this activity. and we continue to innovate and cooperate to ensure our marketplaces are safe and trusted by the consumers and sellers who use our stores. we are on the right path to addressing these issues. it is important to stress, internet companies do not permit illegal or counterfeit goods on their platforms. they have invested hundreds of
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millions of dollars in tools and deployed thousands of people members to implement clear policy. when they find something that violates their terms of service, they take it down. or in other cases never low it up. online platforms and marketplaces bet sellers up front through the direct skpin correct means. they use advanced tools like image detection and machine learning as well as reports from brand owners. -- monitoring for any issues. the partnership with brand owners and rights holders are critical because they are in the best position to identify counterfeit goods. last year amazon enrolled more than 500,000 brands in its free reporting tool. those brands reported 99% reduction in suspected infringement. and less than 0.01% of products
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sold on amazon received a counterfeit complaint from a customer. ebay works with 40,000 individual rights holders to identify property infringement and -- teams have led to 58% increase in intellectual property related take down. beyond these proactive efforts we support the chairman and committees goals of further minimizing the availability of counterfeit and other illegal goods online. international association encourages to consider two aspects that impact sellers, consumers and online marketplaces and platforms. first a national framework that clearly preempts a patch work of states or local laws that ensuren americans continue to receive a consistent internet experience nationwide, while states have an important law enforcement role in protecting consumers and stopping retail threat. federal law should be the sole source of companies that operate
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across state lines. second -- careful not to impose unnecessary burdens on small businesses. many online operations are small --. protecting privacy. recommend changes made in the -- informed consumers act and encouraged by the version recently introduced in the house. -- expectation about the type of information online platforms or marketplaces should collect about high volume sellers and consumers while recognizing burdens and risks to small businesses. the internet industry are partners in the fight to protect consumers and rights holders from the threats opposed by fake goods and bad actors. we hope today's haerlg are further discussion about clear, reasonable requirements within the national from, that can enable online marketplaces to continue providing convenient and safe opportunities to connect sellers and consumers.
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thank you, i i look forward to your questions. >> thank you very much mr. dougan. >> good morning, chairman durbin, ranking member grassley and members of the committee. my name is ben dougan and i'm director of organized retail crime and -- cvs health. reducing retail theft nationwide. opportunity to testify on the massive growth of retail crime and impact on consumers, and communities we service. i want to share first hand what i experienced over 30 years working on the problem. organized retail crime represents a massive and growing threat to the tune of 45 billion dollars a year. the internet is riddled with illegitimate sellers. these criminal organizations
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employ teams or crews of professional thieves that steal products by any means necessary and sell them through online marketplaces. unfortunately these means often include daytime retail theft, threat u intimidation, violence, horrifying stories that play out in our stores every day and which a lot of us see playing out in the media every day. there is one thing i want to leave you with today senators is that we're not talking about shoplifting. we're not talking about individuals that go into a store to steal something for personal use. these crimes are connected to organized crime and carefully planned and controlled by large scale criminal enterprises, with serious economic and human implications. these professional crews can victimize the same store over and over in the same day or they can go to dozens of stores in the same day and travel over multiple states. this is all part of this national retail theft epidemic
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that we're in. and it is being all controlled by organized crime. it is fueled by increase in demand and facilitated by an unregulated online marketplaces. but perhaps the most disturbing is the direct physical harm these crime organizations cause retail employees every day. very recently, a cvs manager was assaulted and remains in serious condition. these incidents are not uncommon. reported violent events at cvs have doubled in the last year. to give it some scale, senators. there is an organized retail crime reported to -- from cvs store every three minutes. and two-thirds of those involve threat of violence, actual violence or a weapon. but there are far less obvious dangers to this crime, including infant formula. a favorite target of these criminal organizations.
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and the investigations that i've worked, these criminals disregard all of the safety protocols for products. they ignore or manipulate expiration dates and are not storing at proper temperatures. compromising the product integrity and endangering the health of an infant. just last week i received disturbing photographs of a surveillance my team had conducted with criminals retrieving stolen baby formula from the basement of an abandoned home, cleaning it up and repackaging it to appear as new for an online seller to sell to an unsuspecting consumer. these products go from the hands of criminals to the hands of families. our investigations involve illicit wholesale operations that include hundreds of professional thieves who steal up to a million dollars of product a month. just at cvs. -- specific instructions on what
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items and quantities the target and purposely direct them to stores in urban and suburban neighborhoods in virtually every state. these stolen products are repackaged, distributed and distributed to the largest online marketplace sellers. and then eventually on to unsuspecting customers. we're talking about dozens of professional thieves traveling to multiple states. 20 or 30 retail stores per day. and stealing tens of thousands of dollars per store. -- over 75 million dollars in cases so far this year but the current law doesn't provide us or law enforcement with the tools we need to hold these people accountable. these criminal organizations are growing more sophisticated, more entrenched and the harm they do to consumers and businesses is only becoming more severe. we work closely with law
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enforcement to address this and educate consumers but we are running out of tools like senator grassley said his opening statement to keep up. we need urgent action from congress. the informed consumers act championed by the leadership of this committee and several of its members will make a meaningful difference for us. this bill will help protect consumers and aid law enforcement and it will prevent crime. making it harder for criminals to easily dispose of zolen goods to online marketplaces is the most significant step we can take to curtail retail theft and reduce the harm organized retail crime represents to our employees and customers. chairman durbin, ranking member grassley, i appreciate your leadership on the issue and commit to combatting organized retail crime. thank you for the opportunity and i welcome your questions. >> thank you mr. dougan. mr. muteric you had a cnn interview couple years ago and you said that one of your
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employees was spending 15-20 hours a week submitting forms asking amazon and other e-commerce sites to remove products with your company's trademarks. is that still going on? >> what's happened is the producers of these goods have realized that infringing our marks is more difficult for them. so they have changed to not infringe our marks but it doesn't change the fact that they do not comply with safety standards and flood the marketplace at severely discounted prices. the problem remains. we just no longer have standing to go to the marketplace through the brand owner protection mechanisms and say please take this down. >> so they aren't using your trademarks or identification. >> it is dropped off significantly because we were so aggressive. and they -- but they do use key words and other things we can't enforce to drive consumers to
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purchasing these types of items rather than the legitimate product. >> dr. camming when i heard you say i think the controlling law case on this subject requires that the marketplace have knowledge of deception or counterfeit status. is that true? >> that is correct. so they need to be notified often by the brand owner that, which is the notice and take down procedure there is a counterfeit posting before they are required by the law to take it down. many marketplaces of course still take down counterfeits. beyond this. but in order for them to be held liable, secondarily liable for trademark counterfeiting, that is the standard for it. so they only have to respond to specific knowledge of a counterfeit posting. >> mr. snowden, i guess the thing that's always mystified me is that these internet marketplaces which have grown in size and all of us use and i think it is pretty safe to say, if they were going maintain their reputation and integrity,
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they should be on our side in this battle. it took eight years to bring them around to that point, why? >> i would say we are on your side. the side of consumer and customer satisfaction reports you will see consumers actually enjoy the online sponsor, for many the convenience but also they get good products. it is right in the sense that yes when we have knowledge of something we have to take it down. but we don't just wait for that. in to 2020 amazon took down over 10 billion bad listings. so this process is going on. online stores, we don't want this information on our marketplaces. it is not our goal. it hurts our reputation as online stores to have this type of activity on our stores. so we want to get it off as fast as we can and it takes us working with retailers, rights owners and law enforcement. >> well, i would say my
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observation, amazon is late to the party but we welcome them as guest. they have said recently we look forward to working with lawmakers to further strengthen the bill. the proposals they made over the years do not strengthen the bill. they strengthened amazon's hand in avoiding the bill. i for one am not going to stand by and watch this watered down any further. we need to move on this. we're going to test your statement that they are on our side. mr. dougan, i asked a competitors of yours in the state of illinois. so why do you have these plastic flaps with the keys necessary for underarm deodorant for goodness sakes? what is going on here. >> that is a direct result of organized retail crime and unfortunately it varies by product by demographic or city or suburban neighborhoods. so we have to lock up those type of products to prevent organized
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crime groups o from stealing them. >> since we have a minute left. so they swoop in with some container and drag everything off the shelf. where do they sell the products. >> online marketplaces is the number one place to dispose of products. they don't come in and steal one or two of these. they steal all the deodorant in the store to maximize profit. and unfortunately most of that product winds up in online marketplace. >> -- markets. >> flee markets are kind of a thing of the past mr. chairman, quite frankly. they still exist but most free market sellers also van online presence so they are not mutually exclusive. they do both. but flee markets don't play the role they used to because quite frankly the internet provides much larger customer base that they can sell products too. >> i'll just close by saying in 2019 u.s. customs and border protection reported 83% of ip
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based seizures and goods came from one country. and you can guess what it is. the equivalent of $1.4 billion. so we have retail theft at home being translated into the fencing of stolen goods and internet marketplaces and then we have the foreign suppliers of counterfeit goods such as mr. muteric has referred to that is another venue. there may be more but those are the two that have been identified so far. senator grassley? >> yeah. to each of you, if you support legislation, what tools would you like to see in those legislation? what tools do you need? >> thank you. a more formal process to identify product we know is unsafe or does not meet safety standards and communicate that to the marketplaces versus only
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having intellectual property protection as the channel to that marketplace. that would be a tool would be useful. >> transparency is very important. we have statistics about take downs and sellers but not necessarily how any of the sellers have counterfeit prior to the taken procedure or what is happening on the back end beyond those initial statistics. so at least from my perspective, the ability to use some of that data for research to study the problem further. >> i would say information sharing is very important among all parties is something critical for this particular live coverage here on c-span2. ♪♪

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