13% of consumers misled into buying counterfeit goods or services

European Union Intellectual Property Office says eastern European countries had the highest number of misled consumers

Cybersquatting is a major concern for SMEs, who often lack the resources to actively monitor their web presence to detect it and their brands’ reputations

Cybersquatting is a major concern for SMEs, who often lack the resources to actively monitor their web presence to detect it and their brands’ reputations

 

Some 13 per cent of Irish consumers have been misled into buying counterfeit goods or services, a significantly higher figure than the EU average of 9 per cent, according to a report published Tuesday by the European Union Intellectual Property Office (EUIPO).

Eastern European countries had the highest number of misled consumers, with Bulgaria (19 per cent), Romania (16 per cent) and Hungary (15 per cent) topping the list. By contrast Sweden (2 per cent) and Denmark (3 per cent) had the lowest figures.

The report – European Citizens and Intellectual Property – notes that the Covid-19 pandemic and the resulting rise in online shopping has led to further uncertainty on the part of consumers.

According to the study, one third of EU citizens wondered whether products or services they had bought were genuine.

Joint EUIPO/OECD research estimates the value of counterfeit imports in the EU at €121 billion with impacts in sectors ranging from cosmetics and toys, alcoholic beverages, electronics, clothing and chemical and pharmaceutical products. Counterfeiting in the pharmaceutical industry alone cost Ireland €223 million in 2020.

While criminals use all modes of transport for illicit trade, seizures from maritime containers dominate in terms of volume and value of goods seized. The East Asia region, most notably China and Hong Kong, account for 80 per cent of the total value of fake products seized from containers worldwide, the research says.

The EUIPO says a particular concern is the proliferation of counterfeit medicines such as an antibiotics, painkillers and products such as personal protection equipment as criminals prey on people’s uncertainty about emerging treatments and vaccines.

Digital piracy

Digital piracy is another lucrative opportunity for criminals. The report estimates that €1 billion a year alone is lost through IPTV – television content delivered through the internet –- harming content producers and legitimate distributors. In Ireland 5.1 per cent of the population access unauthorised IPTV compared to the EU average of 3.6 per cent.

Counterfeiting has a disproportionate impact on SMEs with 18 per cent in Ireland and one in four in the EU as a whole claiming to have suffered an intellectual property (IP) infringement.

EU companies owning IP rights, such as trademarks or patents, reported loss of turnover (33 per cent), damage to their reputation (27 per cent) and loss of competitive edge (17 per cent) due to infringement of their rights.

Cybersquatting is a major concern for SMEs, who often lack the resources to actively monitor their web presence to detect it and their brands’ reputations. Recent analysis from the EUIPO covering 1,000 domain names (similar and variations) related to 20 participating brands suggested that half were suspicious and pointed to websites containing counterfeits.

To help companies to maximise their protection against fakes the EUIPO has recently launched an Anti-Counterfeiting Technology Guide, detailing the main types of technology, including electronic identification or tracking devices, how to place markers on products or packaging, and other chemical, mechanical or digital tools.

The potential use of blockchain technology is also being explored to ensure that original products can be validated as genuine by actors in the supply chain, including customs authorities.

Consequences

Speaking to The Irish Times, the executive director of the EUIPO, Christian Archambeau, noted that research showed encouraging signs that consumers were increasingly aware of the serious consequences of counterfeiting.

“The pandemic has demonstrated that fake goods such as PPE, sanitisers and testing equipment are not only illegal but potentially dangerous as well.

“Consumers are also now increasingly aware that by purchasing a fake T-shirt they may be funding serious crime such as drugs, prostitution and people trafficking.”