Online Counterfeit Goods Market Worth £800m

Figures compiled by DLA Piper and online intellectual property infringement specialists, ComSec International, show that the estimated value of counterfeit goods passing through online shopping sites in the UK each year totals £800m – double the amount over the last 3 years.

For every £100 spent at online auction sites, the research reveals an estimated £5 is spent on counterfeit items. The sorts of products most at risk of infringement and typically removed from online sites include fashion and cosmetic items, consumer electronics, motor equipment and sports goods. In addition to fake brands and trademark infringements, the research also warns online auction sites are a second home for ‘grey market’ trading, in particular the sale of imported manufactured goods at highly inflated prices.

The growth in online shopping, in particular internet auction sites, means that counterfeiters now have more direct and discreet channels to reach consumers. Many fraudulent sellers can earn as much as £20,000 a month trading bootlegged or counterfeit goods with some UK sellers topping the million mark in annualised earnings.

Simon Levine, joint global head of DLA Piper’s technology, media and commercial group said,  ″Counterfeit goods dilute the value of brands, undermine the integrity of auction sites and ultimately cost the UK economy millions of pounds in lost income. But this is not just about protecting brand owners – it’s for the consumer’s benefit also. If you invest your trust and money in a brand you want to know you’re getting the real thing, whether that’s make up and cosmetics or domestic appliances and children’s toys.  Buyers most certainly need to beware – you may think you are getting a bargain, but you could be funding organised crime or buying faulty or dangerous goods in the process.″

“Equally, this is not just a problem for the auction sites to address alone. Consumers need to report illegal or counterfeit trading and copyright owners need to work together with their legal representatives to take more active steps to police their brands online.”

Over the last 2 years ComSec International has recovered its clients £25 million in stolen or counterfeit goods, but it fears its efforts only reveal a fraction of the overall problem.

James Ramm, Director, ComSec International added “E-fencing poses a significant threat to brands and is a false economy for buyers. We use the very latest software to track the infringement of brands online scanning both image and text descriptions, but our data is still only the tip of the iceberg - the full extent of counterfeit trading online may never be known and will continue to thrive unless consumers and brands alike, as well as the sites in question, take action against illegal traders.”