US President Donald Trump signed an Executive Order on 31 January 2020 to prevent the trafficking and sale of counterfeit goods from entering the American online marketplace.
The move follows the Trump Administration’s Memorandum, issued in April 2019, announcing its intention to tackle the problem of illicit trade across the internet, focusing on third-party marketplaces such as Alibaba, Amazon and eBay.
“The President’s historic Memorandum provides a much warranted and long overdue call to action in the US Government’s fight against a massive form of illicit trade that is inflicting significant harm on the American homeland,” said Department of Homeland Security (DHS) acting Secretary Chad Wolf. The counterfeiting and pirating of goods must be stopped in its tracks and DHS is leading the way in protecting both consumers and businesses.
The Memorandum notes how counterfeit trafficking impairs US economic competitiveness, harms intellectual property rights’ holders and the reputation of online markets, poses health and safety risks to consumers and may even threaten national security and public safety should counterfeit goods enter critical supply chains.
The United States Government carries in its political mandate the need to protect consumers, intellectual property rights holders, businesses and workers from counterfeit goods being introduced into the country as a result of the growing e-commerce industry. With the release of this order, the DHS is instructed to take appropriate measures to ensure that e-commerce sites establish the necessary steps for monitoring, detecting and preventing trafficking in counterfeit and pirated goods.
The policy also focuses on preventing powerful opioid drugs like fentanyl from entering the US market, and thus, requiring the US Postal Service (USPS) to tightly control its overseas mail services to block narcotics and other illicit drugs from entering.
The DHS is set to provide a report within the next three months detailing how Customs and Border Protection (CBP) plans to meet the Executive Order.
A changing retail landscape
Online marketplaces and social media platforms have become go-to sites for consumers looking for cheaper alternatives, without necessarily knowing that the goods and products on offer may be fake. The 2018 Global Brand Counterfeiting Report estimated that global losses suffered by companies due to online counterfeiting amounted to US$ 323 billion in 2017.
China has emerged as the top producer of counterfeit goods in nine out of ten analysed categories, according to an OECD Trends in Trade in Counterfeit and Pirated Goods report, further adding to tensions over trade between the US and China.
The effects of counterfeiting are damaging
In 2018, US Customs and Border Protection (CBP) seized US$1.4 billion in intellectual property-infringing goods, up from US$1.2 billion in 2017, with the total number of seizures reaching almost 34,000. Counterfeiting lowers consumer satisfaction, especially when low-quality fake goods are purchased unknowingly; it also leads to revenue losses for rights’ holders and authorised vendors, and erodes brand value through trademark infringements.
Facts not fakes
The fact of the matter is that counterfeiters are quick to find a way around things – even with national policies in place. Brand owners themselves can take further measures, including adopting anti-counterfeiting solutions to protect against the surge in fakes and safeguard their customer base.