E-commerce platforms have grown tremendously throughout the years, becoming a highly profitable venture not only for business needs but for counterfeiters seeking to sell fake and pirated goods online. The Office of the United States Trade Representative (USTR) released the 2019 Review of Notorious Markets for Counterfeiting and Piracy on 29 April 2020.
The Notorious Markets List (NML) highlights 38 online markets and 34 physical markets globally as prominent and illustrative examples that reportedly engage in or facilitate substantial piracy or counterfeiting. Such activities can cause significant harm to U.S. intellectual property (IP) owners, consumers, legitimate online platforms and the economy. Some of the identified markets reportedly host a combination of legitimate and unauthorised activities while others openly or reportedly exist solely to engage in or facilitate unauthorised activity.
Out of Site?
E-commerce giant Amazon made it to the list this year, alongside its five overseas Canadian, French, German, Indian and UK sites. Following in its footsteps are large commercial Chinese players such as Alibaba’s Taobao marketplace, business-to-business e-commerce website DHgate, interactive e-commerce platform Pinduoduo and India’s growing SnapDeal platform.
An estimated 2.5%, or nearly half a trillion dollars’ worth of imports worldwide are counterfeit and pirated products. The report explains that commercial-scale copyright piracy and trademark counterfeiting cause significant financial losses for legitimate US businesses and intellectual property, undermine comparative advantages in innovation and creativity to the detriment of American workers, and pose significant risks to consumer health and safety. Trade organisation American Apparel & Footwear Association (AAFA) chief executive Steve Lamar praised the list, stating how “consumers are learning the hard way that counterfeits affect more than lost sales for famous brands.”
Since the release of the 2018 Notorious Markets List, there have been some successful enforcement efforts over the past year to address widespread availability of pirated or counterfeit goods in certain online and physical markets. Few among the many include:
- BeoutQ, a massive piracy operation widely available throughout the Middle East that streamed illicit content over satellite, through IPTV apps, and via web browsers has stopped operating.
- Pelispedia websites, a popular linking service to unlicensed movies and TV shows in Uruguay that attracted an estimated 44 million visits a month, was shut down while its operators were arrested by Interpol and the national police.
- Mp3va, a notorious market that takes on the appearance of a legal music site but provides unlicensed downloads for unreasonably low prices, significantly dropped in popularity after U.S. credit card and payment processors voluntarily agreed to terminate support for the site in response to right holders’ concerns.
While there have been positive developments since the 2018 report, this year’s NML includes several previously-identified markets because owners, operators and governments failed to address the stated concerns. Other previously-identified markets may not appear in the NML for a variety of reasons, including that:
- The market has closed, or its popularity or significance has diminished,
- Enforcement of voluntary action has significantly reduced the prevalence of IP-infringing goods or services,
- Market owners or operators are cooperating with right holders or government authorities to address infringement,
- The market is no longer a noteworthy example of its kind.
In some cases, online markets in the 2018 NML are not highlighted this year but improvements are still needed, and the United States may continue to raise concerns related to these markets on a bilateral basis with the relevant countries. While there is no penalty for being listed, the NML is made available to the public and encourages the private sector and governments across the globe to use it to complement and inform other actions to reduce piracy and counterfeiting.