Combating Counterfeit Goods in the Age of E-Commerce

Canal Street in New York City, notorious for the exchange of counterfeit goods, lies at the top of the list of places subject to police raids. Sellers in the area boast fake versions of high-end designer products, including purses, perfumes, and watches. Although Canal Street vendors are still arrested for counterfeiting, in recent years consumers more frequently buy counterfeit goods on the internet. Counterfeiting is the practice of manufacturing and exchanging products that are branded to appear like their authentic counterparts but are not genuine. The scope of counterfeit goods goes far beyond luxury items to include products from multiple industries. E-commerce, meaning commercial transactions that take place online, has only increased the diversity of platforms accessible to counterfeiters. Governmental authorities argue that counterfeits, as objects intended to deceive consumers, present several risks of harm to individual customers and the collective economic system. In an e-commerce environment, the risks of counterfeiting brands are especially high. In 2017, for example, Nike withdrew its products from Amazon in part because Amazon houses third-party vendors that sell counterfeit Nike products to consumers. Counterfeiting not only harms the producers of the items being counterfeited, it also harms the broader public. For example, counterfeit items can be dangerous. Pharmaceuticals, which could contain the wrong dosages or incorrect ingredients, may become one of the most counterfeited goods in the United States. Counterfeit goods also pose a risk to the financial success and innovation of honest businesses. Consumer trust in brand authenticity and the health of the global economy are put at risk. And workers may be subject to devastating working conditions to produce counterfeit goods. In the United States, multiple federal bodies develop and enforce e-commerce counterfeit goods regulations. These include the U.S. Consumer Product Safety Commission, the U.S. Food and Drug Administration, the Office of Intellectual Property Rights, the Federal Bureau of Investigation, U.S. Customs and Border Protection, and the National Intellectual Property Rights Coordination Center. In 2020, the Trump Administration issued an executive order to renew efforts to combat the e-commerce counterfeit goods market. At the same time, U.S. Representative Jerry Nadler (D-N.Y.) introduced the SHOP SAFE Act of 2020, which would put the onus of combating counterfeiting on third-party e-commerce platforms by making them liable for any consequences of counterfeit sales. Government officials also suggest that private actors, such as online retailers and consumers, conduct their own initiatives to eliminate the ever-developing counterfeit threat. This week’s Saturday Seminar focuses on approaches to banning counterfeit goods in the age of e-commerce in the United States and beyond