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E-commerce is a key channel for counterfeits to enter the EU




E-commerce is driving counterfeit goods into the European Union (Illustration: EUIPO/OECD By Pop Tika study)
E-commerce is driving counterfeit goods into the European Union (Illustration: EUIPO/OECD By Pop Tika study)
EUROPE. In two different studies published in October 2021, the European Union Intellectual Property Office (EUIPO) denounces the increasing role played by online commerce in the sale of counterfeits. "With a European turnover of €757 billion in 2020, i.e. a 20% jump compared to 2019, the Internet has in recent years become the preferred tool of counterfeiters, whose counterfeit products are estimated to be worth €119 billion, i.e. 5.8% of European Union imports," says the Union of Manufacturers (Unifab), an association for the promotion and defence of intellectual property rights based in Paris.

The first report, produced by the EUIPO and the OECD (Organisation for Economic Co-operation and Development) indicates that "between 2018 and 2020, online retailing grew by 41% in major economies compared to less than 1% for total retail sales". The main reason for this is the Covid-19 pandemic and various periods of containment. "The internet is a breeding ground for fraudsters who take advantage of loopholes in e-commerce governance to engage in all sorts of illegal activities, including counterfeiting," the paper says.

Shoes top of the counterfeiting list

"The growing popularity of e-commerce has not gone unnoticed by counterfeiters. They are increasingly using it to sell fake goods to consumers. While some people buy products thinking they are genuine, others actively seek out low-cost counterfeits," the study said.

91% of e-commerce-related counterfeit seizures involved the postal service. "There is concern that postal authorities and customs are not able to effectively monitor small parcels and letters for counterfeits," the EUIPO notes.
The top products seized were shoes (33.7% of total seizures), clothing (17.3%), perfumes and cosmetics (9.6%), leather goods (8.7%), machinery and electrical equipment (6.5%), toys (5.5%) and watches (5.2%).

More than 75% of seizures of counterfeit goods imported into the EU with a link to e-commerce transactions originate in China. Other countries targeted include Turkey (5.6% of cases) and Singapore (3.3%).

Protecting industrial property to preserve intellectual property

The second study was commissioned by the EUIPO's European Intellectual Property Observatory (EIPO) from the Centre for Intellectual Property Policy and Management (CIPPM) at Bournemouth University in the southern UK. It looks at how IP infringers use e-commerce platforms.

The investigation reveals three main trends that encourage their actions: multiple seller accounts (opening multiple accounts under different names on the same platforms), online advertising (associating their activity with brands but referring traffic to external internal sites), social media presence (announcements and messages through
public, private or selected group communications, or through live sales, then directing customers to illegal sales, either on external platforms or on social media e-commerce sites). Fraudsters also use the darknet, the internet network that protects anonymity by masking IP addresses and allows payments in cryptocurrencies.

The investigation also raises the issue of "grey market" products, products that are genuine but imported and sold without the authorisation of the owner of the industrial property.

For Christian Peugeot, "these studies come at the right time, at a time when the Digital Services Act is being discussed at European level, or a bill is being studied at national level, these elements are proof that a modernisation of the laws that govern the digital world is urgent!" According to the president of Unifab, "protecting intellectual property is more than a duty, it is an obligation to preserve the intellectual heritage of an entire nation from counterfeiters who do not hesitate to steal its creative and innovative intelligence, harm the economy and the environment, as well as dupe consumers by putting their health and safety at risk."

In 2019, the global value of e-commerce sales was equal to 30% of global GDP. In OECD countries, nearly 60% of consumers had purchased products online in 2018 compared to only 38% in 2000.
The different forms of intellectual property fraud according to the European Observatory of Intellectual Property Rights infringements study (data: EUIPO)
The different forms of intellectual property fraud according to the European Observatory of Intellectual Property Rights infringements study (data: EUIPO)


Frédéric Dubessy


Tuesday, October 26th 2021



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