[Congressional Record Volume 165, Number 180 (Tuesday, November 12, 2019)]
[Senate]
[Page S6494]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]



                             Counterfeiters

  Mr. GRASSLEY. Today I am here to discuss the critical need to protect 
American businesses and consumers from the dangers of counterfeits, 
particularly counterfeit goods sold online.
  Counterfeits do incredible damage to our country's economic 
competitiveness. They harm intellectual property right holders and the 
reputation of online marketplaces, undermine the integrity of our 
supply chains, and even threaten the health and safety of consumers. So 
it is Congress's responsibility to use its oversight and legislative 
authority to identify ways to prevent these illicit goods from entering 
our borders.
  Over the past year, I have worked with the Finance Committee Ranking 
Member Wyden to investigate how counterfeiters use e-commerce to sell 
their phony goods to consumers. Last week, we concluded our 
investigation and issued a report detailing our findings.
  Based on the information presented to Senator Wyden and this Senator 
by right holders, trade associations, e-commerce platforms, and common 
carriers, we made five findings in this report, and we identified two 
legislative recommendations for Congress in this report. I believe 
these recommendations will enhance existing efforts within the Federal 
Government to prevent the sale of counterfeits online.
  I will talk briefly about our findings today, and I look forward to 
working with my colleagues--both Republican and Democrat--to identify 
additional areas for congressional action.
  As chairman of the Senate Finance Committee, I recognize the value of 
intellectual property rights and their impacts on society and the 
economy. Intellectual property rights allow businesses to generate new 
ideas and develop creative solutions to everyday problems that can make 
our lives healthier, safer, and more productive. I also understand 
businesses and innovators rely on those rights to help drive and recoup 
their investments.
  In my own State of Iowa, intellectual property represents more than 
$14.4 billion in annual exports for the State, more than 94,000 jobs, 
and supports more than 2,000 small businesses with less than 500 
employees. However, counterfeits are increasingly threatening these 
achievements and the hard work of the people that innovate. It has been 
estimated that international trade for counterfeit goods in 2016 
accounted for $509 billion of world trade.
  Counterfeits are found in both physical and online marketplaces, and 
almost every industry is affected. Scam artists target electronics, 
automotive parts, and even children's toys, to rip-off consumers and to 
make a profit. Counterfeits can also harm consumers. Many consumers do 
not know that counterfeits can be dangerous and that some have been 
found to contain lead, excessive small parts, and even unsafe 
chemicals.
  In 2018, the Government Accountability Office--or GAO, as we know it 
around Washington--examined how e-commerce marketplaces are further 
enabling the sale of counterfeits. GAO found that counterfeiters use 
online marketplaces to sell fakes to consumers because they can hide 
their identity by using false or incomplete names. Counterfeiters also 
post legitimate photos or fake reviews for their products, which makes 
it harder for consumers to determine whether they are buying a 
legitimate or fake good.
  The Grassley-Wyden investigation showed that the breadth and variety 
of goods sold online makes it nearly impossible to prevent the sale of 
all counterfeits. Right holders also told us that their enforcement 
efforts are hindered in part because the U.S. Customs and Border 
Protection shares very limited--and often heavily redacted--importation 
information with these right holders. But right holders need 
importation information to identify counterfeit sellers and report 
suspected counterfeit listings.
  Counterfeits also pose a threat to e-commerce and to common carriers. 
Counterfeits smear the reputation of e-commerce and threaten the 
integrity of the common carrier supply chain network. As such, these 
parties are critical partners in the fight against the sale of 
counterfeit goods. However, Customs and Border Protection does not have 
the authority to share importation information with these parties when 
it identifies a counterfeit at our border.
  During our investigation, these parties told us that this information 
would give them the ability to better protect our country's 
intellectual property and allow them to remove more counterfeit 
listings and block counterfeit sellers. We must look at this problem 
holistically and with the understanding that right holders, e-commerce 
platforms, and common carriers are critical partners in the fight 
against the sale of counterfeit goods and those counterfeit goods being 
sold online. By sharing more importation information, these parties can 
better protect the intellectual property rights of our innovators, as 
well as the health and safety of e-commerce consumers.
  Our investigation is but a first step. I will continue to use my 
oversight authority to look for innovative solutions to protect 
intellectual property right holders and consumers from the negative 
effects of counterfeits.
  Madam President, I yield the floor.
  The PRESIDING OFFICER (Mr. Cassidy). The Senator from Illinois.