Piracy: Consumers show little sense of wrongdoing

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According to a recent study by Ernst & Young, almost every second German has purchased a counterfeit before or can imagine doing so in the future. This lacking awareness of wrongdoing on the part of many consumers has devastating effects on German companies.

More than 30% have already purchased a counterfeit, around 15% can imagine doing so in the future. Every fifth person questioned does not consider the acquisition of illegal coounterfeits to be an offense: These are the shocking results of a study by analysis and consultant agency Ernst & Young (EY), which surveyed 550 businesses and 1,000 consumers in Germany.

More than every second consumer questioned – around 55% – admitted that they had knowingly purchased a counterfeit product, and another 18% had an acute suspicion upon purchase. For around 84% of those who had purchased counterfeits, the price was the decisive factor for doing so.

The sale of counterfeits and the deficient consciousness of wrongdoing among consumers represent a serious problem for many German companies. In the machine and plant engineering sector, for example, 50% of all questioned businesses fell victim to product and brand piracy in the last two years; in the automobile industry even more than 60%.

“The geographical indication ‘Made in Germany’ enjoys worldwide trust and recognition. It is accordingly vulnerable to damages by counterfeiting,” explained EY partner Stefan Heißner. “The damages are not only incurred by loss of revenue, but also by reputation, which can be strongly damaged by a flood of counterfeits. If a counterfeited product does not fulfill the high expectations of an established brand, it harms the brand and consequently the business.”

Nonetheless, many businesses do too little to protect themselves from the theft of their intellectual property. Some 13% of the questioned businesses do not invest in any IP protection whatsoever, and every fourth business invests only 10,000 euro or less each year. The sensitization of employees, suppliers, and customers is also often insufficient: Only half of the companies carry out targeted training sessions regarding IP protection.

“Businesses today can choose from a great variety of tools to combat counterfeiters of their brands and products. This includes, for instance, proper education of business partners and consumers regarding the health and safety risks connected with counterfeits. Only once awareness has been spread in businesses and in society about the damages caused by product and brand piracy will it be possible to effectively protect intellectual property,” continued Heißner.

Source: Ernst & Young

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