The real cost of counterfeits


EU study reveals how online counterfeiting hurts more than just the economy.

Over €45 billion lost worldwide due to fake smartphones, 50,000 jobs lost in the cosmetics and personal care sector due to counterfeits, €1.3 billion in lost spirits and wine sales and €3.5 billion lost in sales of jewellery and handbags every year due to the sales of counterfeits.

These staggering figures, are just some of the headlines that have been found in studies carried out in a collaboration between The European Observatory on Infringements of Intellectual Property Rights and the Organisation for Economic Co-operation and Development (OECD). The reports on the global trade in counterfeit and pirated products analyse the impact on the economy, business, governments and society, in a number of different sectors and geographical areas.

The latest and 12th sector report, released February 2018, focuses on the automobile industry, specifically the economic cost of IPR infringement in the tyres and batteries sectors in the European Union marketplace. This study found that €2.2 billion in the tyre sector and €180 million in the battery sector are lost each year due to counterfeiting across the EU. This translates into approximately 8,400 jobs being lost directly, as legitimate manufacturers employ fewer people than they would have done in the absence of counterfeiting.

Whilst the studies primarily focus on the economic impact of counterfeiting in industrial sectors, they also look at the potential risks to health and safety and environmental damage. This latest study found that counterfeit tyres or batteries can be substandard and unsafe, since testing and quality processes are often non-existent in counterfeit products, putting drivers and other road users at risk. Furthermore, they can also cause damage to the environment, as the materials used to manufacture counterfeit parts may fail to meet safety standards and do not always comply with environmental protection standards.

Do you know the full impact of counterfeits in your industry?

If you haven’t already read the reports, you can see if your industry has been included in one of the EU studies on the global trade in counterfeit and pirated products, in the list below. Whilst this research has been carried out by the EU, the impacts that they conclude can be relevant to companies all over the world.

  • Cosmetics and personal care sector
  • Clothing, footwear and accessories sector
  • Sports goods sector
  • Toys and games sector
  • Jewellery and watches sector
  • Handbags and luggage sector
  • Recorded music industry
  • Spirits and wine sector
  • Pharmaceutical sector
  • Pesticides sector
  • Smartphone sector
  • Tyres and batteries sectors

The full reports for each of the above sectors can be found by visiting the EUIPO website.

If you operate in one of these industries where counterfeiting is rife, you can request a Free Brand Protection Status report to see the scale of infringement to your brand.