January 11, 2023

Combatting Counterfeiting on Online Marketplaces

Over the last several years, I’ve worked with numerous brands to address counterfeiting issues on online marketplaces. Quite often, I’m brought in after a brand or its agency has tried to address the problem without success, sometimes causing additional harm in the process. Whether it’s the marketplace rejecting the counterfeit submission, restricting the brand’s reporting abilities for “improper” submissions, or having counterfeiters reinstated after “appeals,” there are many ways things can go wrong. Addressing counterfeiting on online marketplaces is different than other platforms. Brands need to tailor their approach, act quickly, reach out to appropriate contacts, and be persistent.

The harm caused by counterfeiting is well known, but it’s heightened on online marketplaces. Counterfeiters on marketplaces blend in with legitimate sellers. They tap into an established customer base maintained by the online marketplaces, which adds an air of legitimacy to the seller. Counterfeiters attach their offers onto the brand’s product listings, arousing little suspicion even from sophisticated consumers. Online buyers can’t examine the products in advance and have to rely only on listing content. Marketplaces, at least tacitly, encourage consumers to assume that all sellers on a listing are offering the same exact product.

For successful counterfeit enforcement on online marketplaces, it is important to adjust the tactics compared to counterfeiting on other channels. Reporting the counterfeiting through the platform’s tools is important, but it is almost never enough. Counterfeit sellers have plans in place for when a listing is reported. Some will simply have another storefront ready to activate with a new listing, and others will manipulate platform appeal processes to get reinstated.

Marketplaces have their own quirks that make matters more challenging. Sometimes marketplaces will take action against the brand for allegedly “improper” counterfeit submissions based on fraudulent seller appeals. The marketplace-submission reviewers spend very little time with each infringement report and they are often fooled by counterfeiters providing fake information (e.g., fake invoices) to “prove” to the marketplace that their products are genuine. It may seem surprising that counterfeiters are able to trick these sophisticated marketplaces, but it is all too common. Brands need to account for this as part of their strategy. Brands, or those acting on their behalf, need to interface with the marketplaces outside of standard reporting processes to have any chance of solving the problem.

For example, brands should collect evidence about the scope and depth of the counterfeiting problem. This includes performing test buys to gather evidence of counterfeiting, documenting the instances of counterfeiting, and investigating to determine possible sources of counterfeits. Keeping detailed records and connecting this information together will help make the case that the marketplace should proactively restrict sellers from listing the brand’s products.

In sum, it is important for brands to recognize that dealing with counterfeiting on online marketplaces is different than other sorts of counterfeiting issues. Brands should work with someone experienced with online marketplaces to make sure the issues are resolved in the quickest, most efficient and permanent manner.

To learn more about addressing counterfeit issues contact Adam Sherman at acsherman@vorys.com