Fake products create real hardships

Protecting brands is not just about economics, it is also about human rights...

The hardships in factories around South-East Asia aren’t new to European media consumers. Thousands of workers all around the continent are affected by adverse living and work conditions -- particularly in those factories that make counterfeited goods. In 2016, counterfeited goods amounted to 6.8% of EU imports from third countries, according to the OECD and the European Intellectual Property Office EUIPO. China remains by far the largest producer of fake goods in the world, all while having amongst the worst human rights records.

“Dotted around China’s industrial heartland, well-connected consultants are helping factory owners flout labour laws to churn out goods that end up on the shelves of well-known Western stores”, writes the Hong Kong-based South China Morning Post in a piece that outlines the corruption and abuse that surround the counterfeit goods market.

In Europe, there is a mechanism that allows for oversight and accountability of production sites. No, I’m not talking about political committees or government institutions, but: brands. Brand recognition and corporate responsibility allows Western democracies and its consumers to keep an eye on the products and services they want to support with their hard-earned Euros. If a tech-company is found to produce microchips in factories that accept child labour, inhumane work hours, or unsafe work environments, they will be reprimanded by public opinion, media coverage, and the loss of their customer base. As a result, corporate decisions are made to seek to prevent this from happening in the future. However, counterfeit marketers forgo this accountability, often by tarnishing the reputation of an existing brand.

This is why brands play an essential role in distinguishing good actors from bad ones. In Europe we regularly have conversations about labelling, ignoring that first and foremost, brands are labels in themselves. Trusted brands build a reputation on responsibility, something that they rightfully intend to protect. When it comes to fighting counterfeiting, consumers, producers, and government actors ought to be on the same side.

While rooting out fake products will not eliminate injustice, it is a crucial stepping stone in the fight against organised crime. Outside of the situation of factory workers, counterfeit goods are often linked to criminal organisations of the worst kind. A 2015 report by the French Union for Industrial Production points to the fact that 20 percent of illicit cigarette sales finance international terrorism (according to the French Centre d’analyse du terrorisme in 2015). This number has been filtered out of a total number of 75 international prosecutions involving large-scale counterfeiting of tobacco products.

Actionable items to consider are vast, but first and foremost, we need to put fighting counterfeiting high on the agenda list of trade agreements around the world. If we seek to fight organised crime, we need to do so with our trading partners not against them. It’s important to note that this is not a one-way street -- fighting these bad actors also means opposing the parasitic nature of corruption and fraud that plague the host countries of these organisations as much as they do those that import the goods.

Lastly, fake goods represent an active health threat. The EU is inundated with fake consumer products. According to an annual report by the European Commission, there were 2,253 alerts of dangerous products on the EU market in 2020, 10% of which were COVID-19 related, so like for instance masks and hand sanitizers. In a comical way, Commission Didier Reynders held up a stuffed animal monkey at a press conference in Brussels, to underline that fake children’s toys also represent a significant health threat to the most vulnerable in society: children.

Counterfeiting has no place in a mature market place. The EU ought to step up its game to find more allies in its approach to root out fake products, so that less consumers are defrauded or put in harm's way.