EUIPO report highlights dangers of online counterfeits

A new report from the European Union Intellectual Property Office (EUIPO) has revealed that the internet and social media are increasingly being used to benefit counterfeiters in the EU as a result of advertising revenue.

This problem has a negative impact on genuine brands and websites, whose reputation is being “extensively damaged”.

The report, released earlier this month, collated research carried out by the EUIPO’s EU Observatory in conjunction with the Organisation for Economic Co-operation and Development.  

Key findings of the report indicate that IP-intensive industries contribute approximately 42% of GDP to the EU economy, equating to €5.7 trillion ($6.7 trillion). In addition, they add 38% of employment.

However, the report said that this is being compromised by IP infringement, pointing particularly towards online counterfeiters.

The EUIPO recognised lenient sentences and high returns on investment as strong incentives for “criminal gangs” to become more involved with counterfeiting. The report also said that such criminal organisations are using the internet to promote and distribute physical goods and illegal digital data throughout the world.

According to the report, internet sites and social media are being increasingly used to provide additional benefits to criminals because of advertising revenue.

Aside from investigating the supply of online counterfeit goods, the EUIPO also analysed where the demand for such goods was coming from.

It identified lower prices and the perception that counterfeit goods are more readily accessible as key reasons why EU citizens purchase counterfeit goods and content.

Alison Statham, Anti-Counterfeiting Group (ACG) director general, said that the money that counterfeiters are receiving may be diverted into “other criminal hands” to promote more exploitative crimes.

“In addition, fakes are becoming ever more dangerous and consumers need to be in no doubt that buying cheap does not mean buying safe,” she said.

“EU customs have confirmed that over 30% of fakes coming to the EU have the potential to damage health and safety.”

She added that the ACG will bring the “escalating dangers” associated with counterfeiting to the attention of business leaders and policy makers as they make trade deals.

“However, the vital information on criminal business models will also help to develop enforcement related strategies and we will use this to provide added information and support to our precious enforcement resources to ensure the UK economy, businesses and consumers are more safe and secure.”