Counterfeit crud crooks crossed over to e-commerce during COVID

Piracy-as-a-service, 'bulletproof' ISPs, fake influencers, and big Chinese e-tailers turned a blind eye

The combination of digital technology and COVID-19 caused a shift in the world's trade in counterfeit goods, according to the Office of the United States Trade Representative's annual Review of Notorious Markets for Counterfeiting and Piracy.

The review – which produces a document delightfully monikered the "Notorious Markets List" – details trends in dodgy commerce and names the field's leading players.

This stuff matters to the Reg-reading world because counterfeiters don't just make fake watches and handbags: they also crank out fake Cisco hardware running pirated Cisco software – a combination that exposes unwitting users to infosec and legal perils. When you shop for personal purposes, you also need to beware kit like the 500GB disks that actual contain 128MB USB sticks.

The 2022 edition [PDF] of the list asserts that many sellers of counterfeit kit shut their retail stores during the pandemic, but shifted their activities online and used their stores as warehouses and fulfilment centers instead. Exactly the way many legit retailers did.

The dodgy sellers were helped by social commerce platforms making little effort to detect sales of counterfeits.

The Notorious Markets List names China's WeChat, operated by local web titan Tencent, as one source of such sales, and labels the outfit's efforts to stop trade in counterfeit kit "inadequate".

Another colossal Chinese e-commerce concern, AliExpress, is praised for its anti-counterfeiting efforts but criticized for allowing known vendors of fake tat to re-establish their presences on the service.

DHgate, another Chinese service, was rated the world's foremost wholesale source of counterfeits. The Notorious Markets List notes that it increased use of AI to detect counterfeit kit, but that suppliers are defeating those tools "by altering product images, blurring logos, and using code words to conceal the counterfeit nature of the goods they offer."

And there, dear reader, is your "AI still has its limits" case study for the week.

Human intelligence also has its limits. The document details "dupe" influencers who have the trappings of less fake influencers – large social media audiences and a fondness for bling – but who push counterfeit products. The dupes drive plenty of sales for purveyors of fake products .

Indonesian e-commerce sites Tokopedia and Bukalapak earned faint praise for improving their efforts to keep counterfeit kit off their platforms – plus some criticism for enforcement mechanisms that are hard to use.

Piracy remains rampant, the document states, thanks to "Bulletproof" internet service providers that "explicitly advertise leniency in allowing their customers to upload and distribute infringing content." Other actors offer piracy-as-a-service that focus on creating pirate IPTV streaming operations.

The real world continues to host plenty of counterfeit electronics. The list rates a cluster of 20 malls in Shenzhen, China, as “the epicentre of the counterfeit electronics trade."

Visitors to the district can wallow in cheap, fake, electronic components, plus full and functioning smartphones, tablets, and wireless earbuds.

Again, these operations have gone online: stakeholders who spoke to the Trade Representative while the Notorious List was prepared reported "brick-and-mortar stores instead serve as contact points that provide product sample testing, call centers, and customer fulfilment services for online sales via local and international parcel delivery services."

The Trade Representative also found some good news in the form of successful crackdowns around the world that crimped the sale of counterfeit goods. But the 2022 Notorious Markets List also notes that the trade in counterfeit goods remains linked to human trafficking and forced labor. The document also observes that all counterfeiting hurts creative industries in the US and elsewhere.

And possibly your business, too, when you end up with a fake router. ®