Counterfeits Expected to Top $2 Trillion by 2022
Manufacturers and consumers have a lot to worry about.
May 03, 2017 - Los Angeles, CA – “Counterfeiting and piracy continue to grow at an astounding rate” states a 2017 report "The Economic Costs of Counterfeiting and Piracy" commissioned by the International Trademark Association (INTA) and the International Chamber of Commerce (ICC), Business Action to Stop Counterfeiting and Piracy (BASCAP) unit.
E-commerce websites including Amazon (AMZN), eBay (EBAY) and Alibaba (BABA) have become perfect platforms to enable and support distribution of counterfeit goods, currently a $1.7 trillion global criminal enterprise. The problem is that anybody, anywhere can open a website Marketplace and sell just about anything on the websites. Walmart, Best Buy, and Facebook have also been found to be selling counterfeits on their websites.
Amazon
Apple® reported that 90% of Apple products it purchased directly from Amazon were counterfeit. The Recording Industry Association of America (RIAA) placed orders with Amazon and found that 44 of the 194 top CD's delivered were counterfeit, while Birkenstock® pulled the plug on Amazon sales of its popular sandals citing counterfeit enforcement problems. A Tennessee family is suing Amazon for $30 million after a counterfeit hoverboard caught fire and completely destroyed their $1 million Nashville home and personal property in 2016, injuring two of the family’s four children.
eBay
eBay currently faces a federal lawsuit after cell phone case manufacturer Lunatik® notified eBay over 5,000 times of infringing products offered on eBay in colors, models and materials not offered by Lunatik. Inexplicably, the items remain on eBay. The counterfeit problem extends globally. A French court in 2008 ordered eBay to pay LVMH $60 million for allowing trade in counterfeit goods. An appeal court reduced the sum, but affirmed that eBay had been in the wrong. Counterfeit listings removed from eBay are often relisted by the sellers.
Alibaba
The Office of the United States Trade Representative publicly condemned Alibaba, appropriately named after the fable “Ali Baba and the 40 Thieves,” adding the e-commerce giant (again) to the U.S. Notorious Markets List – reserved for the world’s most notorious markets for counterfeit goods. The action is well deserved. Alibaba claimed it tightened policies against infringement, touting that it took down 380 million infringing product listings and closed about 180,000 stores, just on its Taobao.com subsidiary in the previous 12 months. What Alibaba didn’t reveal in the PR stunt is why more than double the counterfeit items of 2015 were allowed to be listed, how many duped consumers already purchased the products, and how many items were simply relisted – a common practice.
The Counterfeit Report®, a popular counterfeit awareness and consumer advocate, sent formal infringement notices, authorized by the right’s holders, to e-commerce giants Amazon, eBay and Alibaba to remove listings for 10.5 million counterfeit items offered or sold on their websites in just the past year. The products were destined for, or purchased by unsuspecting consumers. Actual sales figures on eBay and Alibaba listings indicate consumers purchased over 693,391 counterfeit or fake items from just the small product sampling monitored by The Counterfeit Report. Amazon listings do not reflect sales.
Alarmingly, the e-commerce websites do not notify buyers they received a fake after notifications by the right’s holder.
Counterfeiting and piracy is a low public priority, illegal $1.7 trillion global criminal enterprise that is profitable, difficult to track and widely unpunished.
E-commerce websites enable and facilitate a criminal underground economy that dislocates hundreds of thousands of legitimate jobs, destroys brand reputations, forces higher burdens on tax payers, exposes consumers to dangerous and ineffective products, and deprives governments of revenues for vital public services.
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