The dark side of fake goods

As consumers prepare for year-end festivities, many are looking for great deals. But a new report from Europol and the European Union Intellectual Property Office (EUIPO) is warning that scammers and organised crime networks use legal entities and loopholes to avoid detection by authorities, and profit from consumers’ appetite for low prices with fake products.

The report, 'Uncovering the Ecosystem of Intellectual Property Crime: A Focus on Enablers’, sheds light on the sophisticated methods employed by scammers and organised crime groups to commit intellectual property (IP) crime and exploit consumer behaviours. It underlines the extensive impact of IP crime on broader society, driven by counterfeit goods and pirated content.

According to the report, approximately 86 million fake items were seized in the EU in 2022 alone, with an estimated total value exceeding EUR 2 billion. The study emphasises that while consumers are drawn to low-priced goods, their decisions inadvertently support a range of other serious crimes, including cybercrime, money laundering and even environmental crime.

João Negrão, Executive Director of the EUIPO, stresses the importance of consumer awareness:

"When consumers opt for counterfeit products or are misled into buying fakes, they are not only receiving substandard goods but are also contributing to a shadow economy that undermines legitimate businesses and fuels other criminal activities. It's essential to understand the real cost of counterfeit goods – a cost that extends beyond the price tag and impacts our society's well-being."

Consumers’ health and safety are jeopardised as sub-standard or falsified pharmaceuticals emerge from hazardous clandestine laboratories, exposing workers and the public to harmful substances. Moreover, the digital domain has become a battleground, with cybercriminals crafting sophisticated fake web shops that not only sell counterfeit goods but also harvest consumers' sensitive payment information, further entangling IP crime with cybercrime.

Catherine De Bolle, Executive Director of Europol, adds:

"Organised crime groups are continuously innovating to exploit consumer demand for counterfeit and pirated goods. They are not only selling fake products but are also stealing personal data and exposing consumers to dangerous products. It's a double-edged sword where consumers are victims and, unknowingly, enablers of these criminal networks."

Overall, the report highlights the increasing sophistication of IP criminals. Organised crime networks stretch beyond borders, engaging in the import, export and production of counterfeit goods, the majority of which are produced in China, including Hong Kong, and Türkiye.

The actors in these operations are no amateurs, according to the report, availing of legal structures at all stages of IP crime, and selecting jurisdictions where it’s difficult for EU law enforcement to shut them down or where penalties are low. In many cases, fake goods are produced outside of the EU and then finalised with tags, fake logos and packaging at sites in Europe.

Experts convene at Intellectual Property Crime Conference

This new joint EUIPO-Europol report was a focus in the IP crime conference organised in Madrid on 24-25 October 2024 by the EUIPO, Europol and the Spanish Guardia Civil. 

The event, titled “Follow the Money to Fight IP Crime,” gathered over 240 delegates from law enforcement agencies, government bodies, and private sector representatives across the globe to discuss innovative strategies to combat intellectual property crime (IPC) and its related financial crime implications.

The conference underlined the necessity of a multi-sector approach to fighting IPC, focusing on financial tracing and public-private partnerships. Discussions emphasized knowledge-sharing, enhancing investigative capacity, and collaborative asset recovery practices. In addition, Europol and EUIPO representatives reinforced the role of the private sector in supporting law enforcement through data sharing and training. A panel was dedicated to the role of social media influencers, focusing on their impact on counterfeit purchasing behaviours and underscored the importance of awareness campaigns.

As a closing highlight, the host country, Bulgaria, for the 2025 Europol/EUIPO IPC Conference was announced, promising further international commitment to combating IP crime through collective innovation and resilience.

For more information about the 2024 Europol Intellectual Property Crime Conference, visit the event page.