Counterfeit Products are Becoming an Epidemic in the US
As the demand for increasingly inexpensive products grows, so too does the revenue for the countless counterfeit rings across the globe. While Americans feel as though they are getting a good deal; the truth is that counterfeit rings are synonymous with organized crime. US customs has had a very strong push to crack down on counterfeit products imported into the United States, and with good reason. Counterfeit products not only cost the United States Billions in potential tax revenue, they also support the growth of human trafficking, child slavery, fund terrorist groups, and result in the deaths of thousands of US citizens annually.
It’s Just a Handbag, What’s the Big Deal?
One of the main problems with counterfeit products is that many people fail to see purchasing a counterfeit product as a crime. Internally, they think,
“So I purchase a fake designer purse, and Coach misses out on a few hundred dollars. So what? It’s not like they can’t afford it”
Unfortunately, purchasing counterfeit products has more important, and further reaching consequences than denying a major brand some revenue.
The Impact of Counterfeit Products on US Employment Rates:
According to research analysts, approximately 2.5 million jobs worldwide have been dismantled by counterfeit black markets. Of those 2.5 million jobs lost, 750,000 American jobs have been lost as a direct result of counterfeit operations (Levin, 2009). And the worst part is that as the counterfeit product industry continues to grow, the impact on employment in the US is only going to be worse.
Counterfeit Products impact jobs because of the revenue lost by manufacturers. Counterfeit products is a $461 Billion industry as of 2013, according to a study released by the Organisation for Economic Co-operation and Development. American businesses and industries lose approximately $200 billion in revenues annually due to counterfeits. How do these manufacturers cope with the loss? By downsizing, and laying off thousands of hard-working Americans.
The Impact of Counterfeit Products on Human Trafficking and Child Slavery
If the impact on the US job market isn’t enough of a problem to deter you from purchasing a counterfeit product, then perhaps the industry’s effect on child labor might be.
“‘I remember walking into an assembly plant in Thailand a couple of years ago and seeing six or seven little children, all under 10 years old, sitting on the floor assembling counterfeit leather handbags,’ an investigator told me… ‘The owners had broken the children’s legs and tied the lower leg to the thigh so the bones wouldn’t mend. [They] did it because the children said they wanted to go outside and play.'” – Deluxe: How Luxury Lost It’s Luster
How do these counterfeit rings sell their products for such low prices? Easily- the vast majority of them do not have to pay for labor. Since these counterfeit operations are underground and hidden, they are completely unregulated. Forced child labor, and human trafficking is no longer just a problem of poor 3rd world countries a thousand miles away. It has come to our own shores, and counterfeit goods do nothing but increase the demand for cheap and free labor for the counterfeit producers. Around the world, regulators find over and over again that these counterfeit product rings are almost entirely dependant on this horrific source of labor. Every fake pair of Nike’s purchased, means just another set of little hands needed to sew.
Impact of Counterfeit Products on United States Health Care
It may surprise you to learn that one of the most impacted industries by counterfeit products is medicine. In an article released by Athens university, titled “The Harmful Effects of Counterfeit Goods” by Arlee Sowder, the author remarks
“It is estimated that about 10% of medicines worldwide are counterfeit. Due to the increasing demand for cheap medicines and low production costs, counterfeiting drugs has become a vast and extremely lucrative market. In 2008, the U.S. government seized $28.1 million worth of fake pharmaceuticals, a 152% increase from 2007”
The worst aspect of this growing impact is that counterfeiters are increasingly faking life saving cancer drugs, HIV treatments, Heart medications and more; meaning patients who are depending on these medicines to save their lives, are taking placebos. And they have no idea that it is happening. And neither do their doctors.
There was a case in Florida in 2004 in which two doctors intentionally manufactured, and distributed counterfeit Botox. One of their many victims were the Kaplans, who fell ill after receiving the counterfeit product. The couple were paralyzed for weeks, and very nearly died – and they were the lucky ones.
“It is impossible to know the exact size of the trade or its lethal impact — some guesses are as high as 700,000 deaths globally each year. I estimate that bad medicines cause at least 100,000 deaths annually.”
And the numbers just keep on growing, showing absolutely no indication of slowing any time soon as nations race to create regulatory agencies to handle the problem.
It All Starts with a Handbag
This is the big deal. This is just a incredibly tiny peek into the ugly, and rapidly growing counterfeit industry. Every fake handbag purchased from Amazon, every knock off Nike sneaker bought in China Town, every discount ipod scored on ebay is the intentional choice to turn a blind eye to the absolute devastation posed by the counterfeit industry. We, as Americans, have to make the decision about what kind of people we are. Are we so intent on getting a good deal that we are okay with children trapped in horrid conditions working for nothing, as long as we don’t see it? Or are we the type of people who can reach a little deeper and spare the extra few bucks to help stop this draconian epidemic in its tracks?
Only time will tell.
-F. Tardini 2016
- Levin, E. K. (2009). A safe harbor for trademark: Reevaluating secondary trademark liability after Tiffany v. eBay.Berkeley Technology Law Journal, 24(1), 491-527.