Amazon thinks AI will help solve its counterfeits problem

On Thursday, the company unveiled Project Zero, which it says will allow brands to take down counterfeit items on their own without Amazon's help.

Amazon (AMZN) — which has long struggled with counterfeit products on its site — will also automatically monitor for fake items. The project uses a type of AI called machine learning that constantly scans Amazon's stores and removes suspected fakes. Companies give Amazon their logos, trademarks and other important information about their brands, and Amazon scans product listings every day looking for bogus items before they are purchased.

Previously, brands had to report counterfeit items to Amazon. Now, Amazon is offering a "self-service counterfeit removal tool" which lets brands take down these items themselves.

Amazon's new product serialization service also offers a unique code for every item, which brands place on products during the manufacturing process. When products with these special serial numbers are ordered on Amazon, the e-commerce giant scans and verifies the authenticity of the purchase and can stop fake products from being bought.

Brendan Witcher, vice president at research firm Forrester, sees the project as a positive step to protect brands and tackle the issue of counterfeiting.

"This is in no way going to create more burden on the side of brands. This essentially helps them quite a bit," he said. "While there was some work that Amazon was doing up to this point, brands had to keep a close eye on what was going on with the website."

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Amazon has been testing the new project with several brands, including Vera Bradley, Thunderworks and ChomChom Roller, and says its systems on average detect 100 times more suspected fakes than its previous process of relying on what brands report to the company.

In its annual report released earlier this month, Amazon included a warning about counterfeit products. It also acknowledged that the fraudulent or unlawful activities of its third-party sellers could harm Amazon's business and reputation.

"We also may be unable to prevent sellers in our stores or through other stores from selling unlawful, counterfeit, pirated, or stolen goods, selling goods in an unlawful or unethical manner, violating the proprietary rights of others, or otherwise violating our policies," Amazon wrote in the report.

Right now, brands can participate in Project Zero only if they are invited. Amazon says it's working to add more brands.

"This gives retailers and brands one less thing to put that much time and attention toward when they're struggling today to create their own relationships with customers," Witcher said.

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