Anti-Counterfeit: What's Really in Your Basket?

INCOPRO’s Helen Saunders asks can Amazon’s new anti-counterfeiting programme stem the booming counterfeit trade on e-commerce platforms

Counterfeiting, particularly in the luxury clothing industry, has been an issue that has plagued brands for decades. Recent data from the European Union Intellectual Property Office estimates that 9.7% of sales in Europe are lost to IP infringement in the clothing, footwear and accessories sector, and it is estimated that it costs brands €26.3bn in lost revenue annually. With increasingly more apparel and accessories sales made online via e-commerce platforms, sales of counterfeit products are skyrocketing. Counterfeiters are also constantly innovating their tactics to mask their online identity, making it more challenging to track counterfeit sales back to the source.

As a global giant in the e-commerce sector, it is reassuring to see that Amazon has acknowledged that is has a role to play in the anti-counterfeiting movement.

As a global giant in the e-commerce sector, it is reassuring to see that Amazon has acknowledged that is has a role to play in the anti-counterfeiting movement. Its new anti-counterfeiting initiative follows a recent series of similar actions from other leading marketplaces: Alibaba’s ‘Big Data Anti-Counterfeiting Alliance’ and eBay’s ‘Authenticate’ programme show that these online marketplaces are beginning to finally see that they have a role in stemming the booming counterfeit trade that thrives on e-commerce platforms.

Nonetheless, thus far there has been an air of mystery as to exactly how Amazon’s programme will operate. Vice President of Amazon Marketplace, Peter Faricy, claims that the programme, launching in North America as early as next month, will let any brand register its logo and intellectual property with Amazon so that they’ll be able to take down listings and suspend seller accounts upon being flagged as counterfeit. The question on everyone’s lips is whether this tool will do more than their ‘report’ tool, which proved to be relatively ineffective when it came to preventing sales of counterfeit products, as it suffered a range of technical issues and limited reporting abilities.

This move comes at an interesting time for the company. Amazon has recently been in the firing line of criticism from several brands who sell on the platform. Amazon’s inability to keep counterfeit activity at bay has reached the point where brands have been re-thinking their partnerships with the platform; last year Birkenstock pulled its stock from the platform altogether because of Amazon’s incapacity to control the problem. Meanwhile, Apple has filed lawsuits against the company after realising that 90% of ‘Apple’ chargers sold were counterfeits.

Some brands have suggested that Amazon has too much control of sales on the platform and uses its position and insight to manufacture private label copies of products from top-selling brands, to then sell to its customer base at a lower price. Many consider the announcement of the marketplace’s anti-counterfeit initiative to simply be a public show to prove it’s making a concerted effort to tackle the issue, to reassure customers and soothe tense relationships with brands.

Despite these concerns, e-commerce platforms taking responsibility for their role in boosting counterfeit sales is crucial in the battle against counterfeiting. The reality is that these e-commerce giants are in an incredibly powerful position to tackle the issue. Marketplaces have unique insight into the users of their sites and have huge quantities of data at their disposal. If this data was properly tapped into, collectively they’d be able to gain a fuller picture of the network of counterfeiters that are operating on their platforms.

Nevertheless, when it comes to considering how to take down commercial scale counterfeiters, indiscriminate efforts analysing data collected from only one platform would be meaningless. Commercial scale counterfeiters often operate on social media to tell consumers about their goods. Though most social media platforms don’t facilitate financial transactions for goods directly, counterfeiters often use these sites to market what they are selling – they sell across multiple marketplaces operating under multiple seller accounts, as well as drive traffic to their domains where potential customers can then buy the product.

The problem lies in the fact that too many manufacturers use site-specific tools that make it very difficult to enforce regulation across multiple platforms efficiently. Until marketplaces recognise that their anti-counterfeiting efforts must be aggregated to comprehensively tackle the problem, it’s hard to imagine that these initiatives will have a strong impact on diminishing counterfeit activity for good.

No doubt the details of Amazon’s new programme will be clarified, but in the meantime, brands shouldn’t rest on their laurels. Though this programme will inevitably not be a solution to counterfeit activity on the platform, it is certainly encouraging to see Amazon taking public responsibility for the issue. The problem is not going to be quick and easy to solve, but as brands and online retailers – as well as social media sites – become more aware of the extent of the issue, we hope we’ll see far more of these crackdown efforts to eradicate the problem once and for all.

Author

Helen Saunders is Head of Intelligence and Operations at INCOPRO with advanced technology to help brands protect their IP online. Helen has a background in law enforcement and the private sector investigating a spectrum of online illegal activity, specialising in online content protection.

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