Illicit trade in counterfeits via the Internet continues to rise significantly, according to a recently published study by EUIPO and OECD. The report concludes that there has been a worrying surge in online crime according to law enforcement agencies, also fuelled by the Covid‑19 pandemic.
According to the analysis, the trade in counterfeit goods via the Web is related to the general spread of online trade in an economy. And online retail (B2C) is growing at a disproportionately high rate: While the corresponding sales in e‑commerce increased by around 41% between 2018 and 2020, the overall retail sales only grew by slightly less than 1%. This boom in e‑commerce happened against the backdrop of the coronavirus pandemic and corresponding restrictions on stationary retail stores in many countries. At the same time, authorities also reported an increase in online crime, for example with illicit goods such as counterfeit and substandard medicines, test kits as well as other products related to Covid‑19.
However, as the study notes, the trend towards trading in counterfeits online was already noticeable in the years before the corona virus pandemic started: Around 56% of customs seizures of counterfeit goods imported into the EU between 2017 and 2019 were already related to online transactions, according to data from Eurostat, the World Bank, and UNCTAD. In 76% of cases, counterfeits related to online trade originated from China, according to a European Union case analysis featured in the study. Counterfeit goods that were related to online trade and that were most frequently seized by authorities in the EU included footwear (around 34%), clothing (around 17%), perfumes and cosmetics (around 10%), leather articles (around 9%), electronic machinery and equipment (around 7%), toys (around 6%), and watches (around 5%).
For counterfeiters, trading online reportedly has clear advantages: It is comparatively easy to set up websites for peddling fakes; and they continue to find new ways to offer counterfeit products on other platforms. For shipping the illicit goods, counterfeiters mostly use postal services. According to the analysis, they accounted for about 91% of seizures related to online trade. In contrast, postal services were only involved in about 45% of seizures of fakes not related to e‑commerce.
The study Misuse of E-Commerce for Trade in Counterfeits was published jointly by the European Union Intellectual Property Office (EUIPO) and the Organisation for Economic Co-operation and Development (OECD) at the end of 2021. Among others, it is based on a quantitative analysis that examines links between online trade and seizures of counterfeit goods by customs authorities. The study is released at a time when new laws against illicit online trade are being discussed in both the EU and the US.
