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 in Intellectual Property Crime Conference
This new joint EUIPO-Europol report was a focus in the IP crime conference organised in Madrid on 23 October 2024 by the EUIPO, Europol and the Spanish Guardia Civil. The conference, titled “Follow the Money to Fight IP Crime,” brought together experts from law enforcement, the private sector, EU agencies, international organisations, and academia. Its purpose was to share experiences and best practices, and to explore opportunities and challenges in combatting IP crime.
The conference began with a full-day program covering key topics such as the enablers and consequences of IP crime, financial investigations aimed at combatting IP crime, asset recovery related to IP crime, and the impact of IP crime on public health and the environment. The day also featured discussions on the United States’ perspective regarding financial and IP crime. On the second day, the conference program focused on the role of social media influencers in promoting counterfeit purchases and strategies for enhancing capacity in financial investigations to fight IP crime.
Via Europol
