WASHINGTON—There is an emerging consensus on best practices in the United States and European Union to combat counterfeit goods on online marketplaces, according to a new report from the Center for Data Innovation. Policymakers should look to these practices when developing anti-counterfeiting procedures within their jurisdiction.
E-commerce increases consumer choice and convenience, but criminal actors exploit online marketplaces—platforms that allow third-party sellers—to sell counterfeit products. These products threaten consumers’ health, safety, and national security, harm legitimate businesses and third-party sellers in online marketplaces, and damage the trademark holder’s reputation and value. The illicit product trade amounts to nearly half a trillion dollars annually.
“As policymakers worldwide aim to protect consumers from these harmful goods, an emerging consensus in the United States and the European Union policies now represent best practices for combating counterfeits,” said Becca Trate, policy analyst at the Center for Data Innovation. “Stopping the illicit goods trade will require effective cooperation and policy alignment. A comprehensive set of reasonable and technically feasible practices will streamline compliance and create a united approach that protects consumers, rights holders, and legitimate businesses.”
Policymakers in the United States and EU consulted with private sector stakeholders to create realistic anti-counterfeiting practices for online marketplaces. The EU Memorandum of Understanding (MoU) on the sale of counterfeit goods on the Internet, published in 2011, detailed key commitments for rights holders and online platforms, including notice and takedown procedures, proactive preventative measures, and cooperation with law enforcement. The Memorandum was revised in 2016 to assess provision implementation and signed by 32 companies and trade associations.
In 2019, President Trump directed the Department of Homeland Security (DHS) to produce a report offering recommendations for the government and private sector to address the sale of counterfeit goods. The report, published in 2020, lists 10 best practices aimed at e-commerce platforms and third-party marketplaces.
The Center’s new report reviews both the DHS report and the MoU to identify the consensus on best practices, endorsed by many representatives from the private sector and government, that can be used to effectively fight online counterfeiting. Policymakers globally should evaluate the best practices outlined by the report when exploring new anti-counterfeiting initiatives to focus on producing unified practices that streamline compliance and create a united front against dangerous and unlawful counterfeit products.
“Policymakers should recognize that these best practices show the value of using soft law approaches to address concerns about online harms,” said Trate. “Policymakers on both sides of the Atlantic have demonstrated that it is possible to bring together stakeholders to work cooperatively on a complex issue; these efforts can be highly impactful and have shown positive results.”