Counterfeiters can include producers, distributors or retail sellers. Growing over 10,000% in the last two decades, counterfeit products exist in virtually every industry sector, including food, beverages, apparel, accessories, footwear, pharmaceuticals, cosmetics, electronics, auto parts, toys, and currency. The spread of counterfeit goods are worldwide, with the
International Chamber of Commerce (ICC) in 2008 having estimated the global value of all counterfeit goods at $650 billion annually, increasing to $1.77 trillion by 2015. Countries mainly the U.S., U.K., Germany, Austria, Italy, France, Spain, Netherlands, Belgium, Switzerland, Denmark, Sweden, Norway, Finland, South Korea and Japan are among the hardest hit, as their economies thrive on producing high-value products, protected by intellectual property rights, including trademarks. By 2017, the U.S. alone was estimated to be losing up to $600 billion each year to counterfeit goods, software piracy and the theft of copyrights and trade secrets.
Wine In China, counterfeit high-end wines are a growing beverage industry segment, where fakes are sold to Chinese consumers. Artists refill empty bottles from famous chateaux with inferior vintages. According to one source, "Upwardly mobile Chinese, eager to display their wealth and sophistication, have since developed a taste for imported wine along with other foreign luxuries." In China, wine consumption more than doubled since 2005, making China the seventh-largest market in the world. The methods used to dupe innocent consumers includes photocopying labels, creating different and phony chateaux names on the capsule and the label. Sometimes authentic bottles are used but another wine is added by using a
syringe. The problem is so widespread in China, the U.S. and Europe, that auction house
Christie's has begun smashing empty bottles with a hammer to prevent them from entering the black market. During one sale in 2008, a French vintner was "shocked to discover that '106 bottles out of 107' were fakes." According to one source, counterfeit French wines sold locally and abroad "could take on a much more serious amplitude in Asia because the market is developing at a dazzling speed." Vintners are either unable or hesitant to fight such counterfeiters: "There are no funds. Each lawsuit costs 500,000 euros," states one French vintner. In addition, some vintners, like product and food manufacturers, prefer to avoid any publicity regarding fakes to avoid injuring their brand names.
Counterfeit wine is also found in the West, although primarily a problem for collectors of rare wine. Famous examples of counterfeiting include the case of
Hardy Rodenstock, who was involved with the so-called "Jefferson bottles," and
Rudy Kurniawan, who was indicted in March 2012 for attempting to sell faked bottles of
La Tâche from
Domaine de la Romanée-Conti and
Clos St. Denis from
Domaine Ponsot. In both cases, the victims of the fraud were high-end wine collectors, including
Bill Koch, who sued both Rodenstock and Kurniawan over fake wines sold both at
auction and privately.
Online sales In a report by the U.S.
GAO in 2018, approximately 79 percent of the American population had bought products online. For 2017 it was estimated that online sales of counterfeit products amounted to $1.7 trillion.
Pew Research Center states that worldwide such e-commerce sales are expected to reach over $4 trillion by 2020.
CBP has reported that with e-commerce, consumers often import and export goods and services which allows for more cross-border transactions which gives counterfeiters direct access to consumers. In buying counterfeit goods directly from other smaller sellers, location is becoming less a factor, since consumers can purchase products from all over the world and have them delivered straight to their doors by regular carriers, such as USPS, FedEx and UPS. Whereas in previous years international counterfeiters had to transport most counterfeits through large cargo shipments, criminals now can use small parcel mail to avoid most inspections.
Apparel and accessories s watches According to the
Organization for Economic Co-operation and Development (OECD) in 2016,
Ray-Ban,
Rolex,
Supreme and
Louis Vuitton were the most copied brands, with Nike being the most counterfeited brand globally. Counterfeit clothes, shoes, jewelry and handbags from designer brands are made in varying quality; sometimes the intent is only to fool the gullible buyer who only looks at the label and does not know what the real thing looks like, while others put some serious effort into mimicking fashion details. Others realize that most consumers do not care if the goods they buy are counterfeit and just wish to purchase inexpensive products. The popularity of
designer jeans in the late 1970s and early 1980s spurred a flood of counterfeits. Factories that manufacture counterfeit designer brand garments and watches are usually located in developing countries, with between 85% and 95% of all counterfeit goods coming from China. The oldest museum of this kind is located in Paris and is known as
Musée de la Contrefaçon. In fashion, counterfeit goods are usually sold on markets and street corners. Though purchasing these goods might seem harmless to those who purchase them knowingly, the National Fraud Intelligence Bureau in England has advised people not to buy counterfeit goods, as their production often funds more serious crime. Many
fashion houses try to stop counterfeits from circulating in the market; Louis Vuitton has an entire team solely focused on stopping counterfeits. Gucci has adapted the counterfeit culture into its designs, changing the spelling of
Gucci to 'Guccy' for its spring/summer 2018 collection and painting REAL all over the bags. Consumers may choose to actively dismiss these unclear origins of product when a trendy style is available for little money. The
French terrorist attack in 2015 at Charlie Hebdo has been traced back to being funded by counterfeit products. According to Tommy Hilfiger's Alastair Grey, terrorists bought the guns used with funds gained from selling illegal luxury sneakers. This is more normal than consumers may think. Grey discusses how often sellers will be overlooked by watch-groups, as buying fakes from a distributor in China is less suspicious than other, more extreme criminal activity. The cause and effect of this discounting of crime is giving sellers money to partake in terrorism, human trafficking and child labour. They are then finished within the country. This is due to the increase in seizing of product at borders. The counterfeiters are reactive to the increasing crackdown on the illegal business practice. Stock-rooms have been replaced with mobile shopping vans that are constantly moving and difficult to track. Companies all over the internet are illegal e-boutiques that use platforms like eBay, Instagram and Amazon to sell counterfeit goods. Sometimes they own their own websites that have untraceable IP addresses that are often changed. Listings are also often posted on the story feature; hence, they are not permanent. The problem is getting larger according to Vox and is getting more difficult to monitor. In 2019, Amazon launched a program known as 'Project Zero' to work with brands to find counterfeit objects on the site. This technology has given private users and companies the capability to gauge handbags certification. Within time, this technology will be widely adaptable to larger platforms. Project Zero offers Amazon partners to flag fake listings without Amazon having to step in. Since Amazon has over five billion listings, a computerized element is also crucial for keeping up with getting rid of fakes. Based on assets and codes provided by Amazon partners, this program scans items and deletes fake ones. Recently, the battle between counterfeiters and retailers-designers has changed. Shifting opinions among young consumers has created increased demand for 'dupe' products that may not be a direct or illegal counterfeit but a clear copy of a more upmarket design. According to a report released by authentication service Entrupy, 52% of shoppers age 15-24 purchased a counterfeit item in 2022, and 37% of the cohort admits they knew the good was fake when they purchased it. Notably, Chinese e-commerce fast fashion retailer
Shein and US e-commerce giant Amazon have enabled this trend. In 2019, multiple brands such as Nike and Birkenstock stopped selling their products on Amazon in protest of the flagrant counterfeits on the platform. Simultaneously, in the luxury market, high fashion brands such as
Mugler are beginning to use
blockchain technology to provide their products with unique digital identification, make authentication and ownership records simpler and also enabling customers to access unique online content. The
European Commission has laid out regulations to require "Digital Product Passports" for new all textile products manufactured in or imported to the EU beginning in 2030.
Electronics flash memory IC (right) and its counterfeit replica (left); although the packaging of these ICs are the same, an X-ray image reveals that the inside structure of the fake one is different
Counterfeit electronic components have proliferated in recent years, including
integrated circuits (ICs), relays, circuit breakers, fuses, ground fault receptacles, and cable assemblies, as well as connectors. The value of counterfeit electronic components is estimated to total 2% of global sales or $460 billion in 2011. Counterfeit devices have been
reverse-engineered (also called a Chinese Blueprint due to its prevalence in China) to produce a product that looks identical and performs like the original, and able to pass physical and electrical tests. In 2012, a U.S.
Senate Armed Services Committee report highlighted the risks when it identified approximately 1,800 cases of suspected counterfeit parts in the defense supply chain in 2009 and 2010. They can also pose major threats to health and safety, such as when an implanted heart pacemaker stops, an anti-lock braking system (ABS) fails, or a cell phone battery explodes. In 2017 the
OECD estimated that one in five (19%) of smartphones sold worldwide were counterfeit, with the numbers growing. Alibaba founder
Jack Ma said "we need to fight counterfeits the same way we fight drunk driving." Counterfeit phones cause financial losses for owners and distributors of legitimate devices, and a loss of tax income for governments. In addition, counterfeit phones are poorly made, can generate high radiation, contain harmful levels of dangerous elements such as lead, and have a high chance of including malware.
night markets,
mail order, and numerous
Internet sources, including open auction sites like
eBay. If the counterfeit media has packaging good enough to be mistaken for the genuine product, it is sometimes sold as such. Music enthusiasts may use the term
bootleg recording to differentiate otherwise-unavailable recordings from counterfeited copies of commercially released material. In 2014, nearly 30% of the UK population was knowingly or unknowingly involved in some form of piracy through streaming content online or buying counterfeit DVDs, with such theft costing the UK audiovisual industries about £500m a year. Counterfeits are particularly harmful to smaller, independent film-makers, who may have spent years raising money for the film. As a result, the value of intellectual property becomes eroded and films are less likely to be made. In 2018, U.S. agents seized more than 70,000 pirated copies of music and movies from a home in Fresno, California. Although it was a relatively small portion of all imported counterfeits, according to one expert: China has been targeted by the
Motion Picture Association of America (MPAA) for distributing pirated movies and television shows. A selection of websites, internet newsgroups, peer-to-peer online networks and physical locations renowned for sharing illegal content, were presented to officials. Other countries were also listed as sources, including Russia, Brazil, Canada, Thailand and Indonesia. In August 2011, it was reported that at least 22 fake
Apple Stores were operating in parts of China, despite others having been shut down in the past by authorities at other locations. The following month, also in China, it was discovered that people were attempting to recreate the popular
Angry Birds franchise into a theme park (
see here) without permission
from its Finnish copyright/trademark owners. 3D printed products Counterfeiting of countless items with either large or relatively cheap 3D printers, is a growing problem. The sophisticated printing material and the ever-expanding supply of digital CAD designs available online, will contribute to a black market for counterfeit goods. The
Gartner Group estimated that intellectual property loss due to 3D printer counterfeiting could total $100 billion by 2018. Among the technological fields that can be victimized by counterfeits are auto and aircraft parts, toys, medical devices, drugs and even human organs. According to one intellectual property law firm: Along with making illicit parts for almost any major product, the fashion industry has become a major target of counterfeiters using 3D printing. The
OHIM in 2017 found that approximately 10% of fashion products sold worldwide are counterfeits, amounting to approximately $28.5 billion of lost revenues per year in Europe alone. Industry leaders feared that budding counterfeiters would soon be creating bags, apparel and jewelry at a lower production cost after gaining access to pirated blueprints or digital files from manufacturers.
Toys Counterfeit toys leave children exposed to potentially toxic chemicals and the risk of choking. An estimated 10 to 12 percent of toys sold in the UK in 2017 were counterfeit, with the influx of counterfeit goods coming primarily from China. Trading Standards, a UK safety organization, seizes tens of thousands of toys every month to prevent children coming into contact with them, according to the British Toy and Hobby Association (BTHA).
Australian toy manufacturer
Moose Toys have experienced problems with counterfeiting of their popular
Shopkins toys in 2015. In 2013, five New York–based companies were accused of importing hazardous and counterfeit toys from China. Among the merchandise seized were counterfeit toys featuring popular children's characters such as
Winnie the Pooh,
Dora the Explorer,
SpongeBob SquarePants,
Betty Boop,
Teenage Mutant Ninja Turtles,
Power Rangers,
Spider-Man,
Tweety,
Mickey Mouse,
Lightning McQueen and
Pokémon. In 2017, the
U.S. Customs and Border Protection seized $121,442 worth of counterfeit children's toys that arrived into port from China and was destined for a North Carolina–based importer. The shipment was found to contain multiple items bearing trademarks and copyrights registered to
Cartoon Network,
Saban Brands, and
Danjaq, LLC.
Pharmaceuticals According to the U.S.
FBI, the counterfeiting of pharmaceuticals accounts for an estimated $600 billion in global trade, and may be the "crime of the 21st century." They add that it "poses significant adverse health and economic consequences for individuals and corporations alike." The
World Health Organization (WHO) estimates that over 30% of pharmaceuticals in developing countries are fake, stating that "Anyone, anywhere in the world, can come across medicines seemingly packaged in the right way but which do not contain the correct ingredients and, in the worst-case scenario, may be filled with highly toxic substances." About one-third of the world's countries lack effective drug regulatory agencies, which makes them easy prey for counterfeiters. Globally, more than half of counterfeit pharmaceuticals sold are for life-threatening conditions, such as malaria, tuberculosis, HIV/AIDS, and cancer. with the
Centers for Disease Control and Prevention (CDC) claiming that sixty-six percent (66%) of the 63,600 overdose deaths in 2016 were caused by opioids, including fentanyl. The
Drug Enforcement Administration (DEA) found that "customers can purchase fentanyl products from Chinese laboratories online with powdered fentanyl and pill presses" which are then shipped directly to buyers via regular mail services such as USPS, DHL, FedEx, and UPS. Buyers are attracted to rogue online pharmacies since they pose as legitimate businesses. Consumers are motivated by lower prices, and some are attracted by the ability to obtain prescription drugs without a prescription. Of the drugs bought online, however, 90 percent are found to come from a country different from one the website claims. According to
The Economist, between 15%-30% of
antibiotic drugs in Africa and South-East Asia are fake, while the UN estimated in 2013 that roughly half of the
antimalarial drugs sold in Africa—worth some $438m a year—are counterfeit. In early 2018 29 tons in counterfeit medicine were seized by
Interpol in
Niger.
Pfizer Pharmaceuticals has found fake versions of at least 20 of its products, such as
Viagra and
Lipitor, in the legitimate supply chains of at least 44 countries. Pfizer also found that nearly 20% of Europeans had obtained medicines through illicit channels, amounting to $12.8 billion in sales. Other experts estimate the global market for fake medications could be worth between $75 billion and $200 billion a year, as of 2010. Other prescription drugs that have been counterfeited are
Plavix, used to treat blood clots,
Zyprexa for schizophrenia,
Casodex, used to treat prostate cancer,
Tamiflu, used to treat influenza, including
swine flu, and
Aricept, used to treat
Alzheimer's disease. The EU reported that as of 2005
India was by far the biggest supplier of fake drugs, accounting for 75 percent of the global cases of counterfeit medicine. However, many drugs and other consumer products that were supposedly made in India, were actually made in China and imported into India. Another 7% came from
Egypt and 6% from
China. Those involved in their production and distribution include "medical professionals" such as corrupt pharmacists and physicians, organized crime syndicates, rogue pharmaceutical companies, corrupt local and national officials, and terrorist organizations. A 2014 report by the U.S.
Congressional Research Service listed the leading food categories with reported cases of fraud as olive oil; fish and seafood; milk and milk-based products; honey, maple syrup, and other natural sweeteners; fruit juice; coffee and tea; spices; organic foods and products; and clouding agents. Deceptive and inaccurate ingredient lists are increasingly common. It is especially problematic when heavy metals such as lead are added to spices, as it can cause
lead poisoning.
United States • In 2007, the
University of North Carolina found that 77 percent of fish labeled as
red snapper was actually
tilapia, a common and less flavorful species. The
Chicago Sun-Times tested fish at 17 sushi restaurants found that fish being sold as red snapper actually was mostly tilapia. Other inspections uncovered
catfish being sold as
grouper, which normally sells for nearly twice as much as catfish. Olive oil is considered one of the most frequently counterfeited food products, according to the FDA, with one study finding that many products labeled as "extra-virgin olive oil" actually contained up to 90% soybean oil. • From 2010 until 2012, the conservation group
Oceana analyzed 1,200 seafood samples from 674 retail outlets in 21 U.S. states. A third of the samples contained the DNA of a different type of fish to the one stated on the product label. They found that fish with high levels of mercury such as
tilefish and
king mackerel were being passed off as relatively safe fish like
grouper.
Snapper (87%) and tuna (59%) were the most commonly mislabeled species. • Genetic testing by the
Boston Globe in 2011 found widespread mislabelling of fish served in area restaurants. • The "secondary" grocery industry is susceptible to food fraud by diverting products deemed unfit for consumption. The
Food and Drug Administration, the primary regulatory body for food safety and enforcement in the United States, admits that the "sheer magnitude of the potential crime" makes prevention difficult, along with the fact that food safety is not treated as a high priority. They note that with more than 300 ports of entry through which 13 percent of America's food supply passes, the FDA is only able to inspect about two percent of that food.
Europe Food counterfeiting is a serious threat in Europe, especially for countries with a high number of trademark products such as Italy. In 2005, EU customs seized more than 75 million counterfeited goods, including foods, medicines and other goods, partly due to Internet sales. More than five million counterfeit food-related items, including drinks and alcohol products, were seized. According to the EU's taxation and customs commissioner, "A secret wave of dangerous fakes is threatening the people in Europe."
Incidents •
2008 Irish pork crisis: Contaminated animal feed distributed to several farms led to large amounts of
dioxins to be discovered in pork products, leading to a recall by the
FSAI. •
2013 horse meat scandal: Multiple countries in the EU found undisclosed horse meat and pork in food products that were labelled as only containing beef. •
2013 European aflatoxin contamination scandal: Several European countries reported nationwide
aflatoxin contamination in milk.
Asia Food fraud is a growing concern in the
Asia–Pacific region. Examples include the injection of non-food grade gels into shrimp and prawns to increase their weight and visual appeal
Cigarettes Illicit cigarettes are an example of the multi-pronged threat of counterfeiting, providing hundreds of millions of dollars per year to terrorist groups. The harm arising from this amalgam of
contaminants sits on top of any baseline hazard ascribed to commercial
tobacco products. With the sales of illicit cigarettes in Turkey, for example, exceeding 16.2 billion cigarettes per year, Turkish Prime Minister Erdogan labeled counterfeit tobacco as "more dangerous than terrorism".
Military items According to a U.S. Senate committee report in 2012 and reported by ABC News, "counterfeit electronic parts from China are 'flooding' into critical U.S. military systems, including special operations helicopters and surveillance planes, and are putting the nation's troops at risk." The report notes that Chinese companies take discarded electronic parts from other nations, remove any identifying marks, wash and refurbish them, and then resell them as brand-new – "a practice that poses a significant risk to the performance of U.S. military systems. In this case however, it is usually not the components themselves which are counterfeit: they have in most instances been fabricated by the expected manufacturer or by a licensee who has paid for the appropriate
intellectual property. Rather, what is fraudulent is the issuing by the reseller of a
Certificate of Conformity that claims that their provenance is traceable, sometimes accompanied by the components being remarked to make it appear that they have been manufactured and tested to more stringent standards than is actually the case. There have, however, been situations where components have been fully counterfeit. A fairly typical example is that of
USB to
Serial port "dongles" ostensibly manufactured by
FTDI, Prolific and others which in practice contain a general-purpose
microcontroller which has been programmed to implement the same programming interface to a greater or lesser extent. Another example is that of
electrolytic capacitors which have been sold as originating from a highly regarded manufacturer but in practice are merely shells which contain a lower-specification (and physically smaller) component internally.
Other counterfeit product categories These include items which purport to be original art, designer watches, designer china, accessories such as sunglasses and handbags, and all varieties of antiques. In some cases the copying process has proceeded through several vendors, and it is possible to see gradual changes as the chain of "counterfeits of counterfeits" progresses. These products frequently show up for sale on online sites such as Amazon and eBay. Efforts to report them as fraudulent receive little response. ==Enforcement==