The counterfeit and pirated products industry

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The global counterfeit and pirated products industry accounts for up to 2.5 % of global trade, or the equivalent of US $461 billion.

This is equivalent to the GDP of Austria, or that of Ireland and the Czech Republic combined. Right holders, governments and the economy as a whole may suffer significant economic and social losses. A targeted analysis of the European Union shows that, in 2013, imports of counterfeit and pirated products accounted for up to 5 % of imports, or the equivalent of EUR 85 billion.

In the EU, French and Italian brands are the most affected.

This suggests that the relative impact of counterfeiting on a group of developed countries such as the EU is twice as great as for the world as a whole. The scale of the phenomenon is greater now than a decade or so ago.

Many products are affected by counterfeiting and piracy, from luxury goods to everyday consumer goods, via business-to-business products.

Any product whose intellectual property adds economic value for right holders and creates price differences becomes a target for counterfeiters. Counterfeit products include luxury products intended for high-end customers, such as watches, perfumes and leather articles, business-to-business products such as machinery, chemicals and spare parts in all price ranges, but also consumer products such as toys, medicines, cosmetics and foodstuffs. Certain counterfeit products, such as medicines, spare parts and toys, are of very low quality and can pose significant risks to health and safety. Counterfeiters and pirates maximise their profits by targeting all potential market segments. This applies to secondary markets, where consumers intentionally buy counterfeit products from counterfeiters and pirates, and primary markets, where the purchasers of counterfeit products are being misled, thinking that they are buying legitimate articles. The ability of counterfeiters and criminal networks to quickly identify gaps and shortcomings and thus to exploit arbitrage opportunities is rapidly increasing. The share of small consignments, usually sent by post or by courier, continues to rise. This is apparently due to the low cost of these modes of transport and the growing importance of the internet and of e-commerce in international trade. This results in increased inspection and seizure costs for customs services as well as additional problems for the police. Counterfeit products — manufactured in Europe or other parts of the world — are on the increase, creating risks for consumer health and welfare and distortions of competition, harming the interests of legitimate manufacturers and their brands, undermining employment and cutting tax revenues.

The EESC could draw up an own-initiative opinion, putting forward recommendations with a view to tightening up the law and national measures for combating counterfeiting and seeking harmonisation at European level; tasking the competent authorities with collecting statistical data on the links between counterfeit products and deaths or accidents, e.g. by groups of products; devising policies to monitor, control and prevent more effectively the risks posed by counterfeit products to public health; improving communication with consumers and alerting them to the risks posed by counterfeit products and teaching them how to identify these products; encouraging the business community to pool information more effectively on problems linked to counterfeiting and to step up measures designed to combat counterfeiting, e.g. special telephone hotlines for consumers and improved data management systems; drawing up special rules for monitoring sales of medicines and other sensitive products on the internet; involving local actors, inter-sectoral groups and consumer associations more actively in the fight against counterfeiting at national level, in particular by means of information campaigns; giving customs officers sufficient means and resources and appropriate training in methods and policies for detecting counterfeit products; making large-scale use of digital product tracing technologies; maintaining a high level of technical standards and intellectual property rights in the EU etc.