Online fakes cost up to €167 billion

Brand protection firm NetNames has released new research estimating that EU member states are losing more than $167 billion to online counterfeits annually.

Its report, The Risks of the Online Counterfeiting Economy, which was created in partnership with the Centre for Economic and Business Research, went on to set the value of the global counterfeit market at $1.7 trillion, causing the loss of up to 2.5 million jobs worldwide, including 750,000 in the US, 107,500 in Germany and 72,000 in the UK.

It said that globalisation and internet had created an “ideal environment for counterfeiters, allowing them to sell goods directly to customers worldwide with virtually no barriers to entry, low overheads, easier distribution and fewer risks of being caught”.

“The online economy offers many new opportunities for counterfeiters to further their reach, profitability and anonymity ... Fraudsters can also target brands and consumers with a new range of digital weapons, such as phishing, cybersquatting, traffic diversion and other forms of online fraud.”
Fast moving consumer goods are the most targeted, according to the report, with the largest markets occurring in pharmaceuticals, electronics and food, though tobacco products were the items most frequently seized by authorities.

Stuart Fuller, director of commercial operations at NetNames, said: “Whilst we know counterfeiting is an increasing global issue, this report clearly highlights the shocking economic impact it is having on markets across the globe.”

“Counterfeiting is not only an economic issue, but also a health and societal issue—with dangerous
counterfeit goods threatening the health of consumers, as well as the highly concerning link between counterfeiting and organised crime.”