Electronic parts manufacturers are increasingly making a comeback thanks to a flood of low-cost electronic parts from China, but the government has yet to address how to fight the emerging threat.
The Federal Trade Commission is pushing for more regulations, including requiring electronic parts suppliers to be more transparent about who’s selling their products and to better identify potential buyers.
The FTC’s Consumer Protection Bureau recently filed a petition with the Federal Communications Commission, which oversees internet service providers, asking for more enforcement of laws banning deceptive practices by manufacturers.
The FTC petition cites a 2014 study that found a total of 6.7 million counterfeit electronic parts were sold in 2015, but there’s no official figure for how many of those were sold through online retail chains like Amazon and eBay.
The petition asks the FCC to adopt an online database of sellers and dealers to better track counterfeit sales.
“Consumers who rely on these online services have the ability to avoid or prevent counterfeit goods from being purchased,” FTC Director Jessica Rich wrote in a letter to the commission last month.
“This information could help us track and protect consumers in the marketplace.”
“This is a huge problem,” said Jennifer Kagan, senior vice president of policy at the American Institute of Certified Electronic Millwrights (AICEM).
“The manufacturers who supply them are going to make sure their product is in a very good state of repair, and that they are doing a great job.
The consumers who buy those products need to know that those people are going out there to fix them, not just to buy the parts.”
Kagan said she has not seen any evidence that Chinese companies are offering more information about who sells their products.
She noted that the FTC and other federal agencies are also investigating counterfeit parts suppliers in the U.S. and abroad.
“I’m not sure that the Chinese government is going to change their approach to this,” Kagan said.
“I think they’re going to continue to be aggressive.
I think they’ll continue to take advantage of this as an opportunity to market their products in a way that is going away.”
In its petition, the FTC argues that manufacturers who offer online dealerships have the incentive to target consumers because they make more money selling counterfeit parts.
“Consumers should be able to easily find the most up-to-date information about any manufacturer that sells an electronic component online, whether that’s on the website of their online retailer or on the Internet at large,” the petition reads.
In a statement, the American Electronic Manufacturers Association, which represents electronics and computer parts manufacturers, dismissed the FTC’s petition as “biased” and “misguided.”
“The FTC’s focus on online sales is misguided,” the association said in a statement.
“We believe that the only effective way to fight counterfeit electronics is to keep consumers informed about the manufacturers and suppliers who are making their products.”
The petition to the FCC also cites research that found online sales of parts from companies that make products that require the use of a battery are increasing.
The National Electronic Parts Manufacturers’ Association estimates that Chinese manufacturers make about $3.5 billion a year from online sellers.
While the FTC has not announced any action on this issue, there is growing concern among consumers about online counterfeiters and other unscrupulous companies selling parts in a counterfeit fashion.
The Associated Press reports that Chinese officials have been warning the Chinese people that the country’s counterfeit industry could reach $20 billion within a decade.
The American Manufacturing Council, which is a trade association of more than 1,500 American manufacturers, estimates that China has a global supply of 1.2 million parts for electronic products, including batteries and other electronic components.