A report from the WIPO Advisory Committee on Enforcement presents the findings of their research into anti-counterfeiting practices by online marketplaces. The research looked at the practices and policies of 50 online marketplaces (44 “traditional” online marketplaces and 6 social media/search engine marketplaces) as well as 16 technology providers.
The report concludes that only 8 of the 50 marketplaces studied had “coherent anti-counterfeiting strategies”. Of the other 42 marketplaces studied and deemed not to have a sufficient strategy in place, WIPO considers that some of these are “indifferent to the counterfeit problem” and in some cases, written policies are reportedly a “window-dressing” whilst actual actions to tackle counterfeits fall short. Furthermore, in respect of social media marketplaces, WIPO concludes that anti counterfeiting strategies are “well short of that required to serve the sector's business model”.
The overall message of the research is that "the online marketplace industry is struggling to contain the counterfeit problem”.
It is no secret that the rise in popularity of e-commerce (which was in part escalated by the Covid-19 pandemic) and the explosion of social media marketplace platforms over the last few years has allowed counterfeiters to take advantage of the relative anonymity of the Internet and to increase their reach to new consumers all over the world. However, WIPO's report suggests that the “online market industry is failing to tackle the counterfeit problem through self-regulation and the implementation of coherent ethical programs” and those who are making strides in this area were deemed to be in the minority of marketplaces studied.
WIPO's recommendation is that the industry considers a “generic, risk-based framework” to tackle counterfeiting online, similar to the frameworks under the International Organisation for Standardisation (ISO). The report acknowledges that it would be impractical to “[establish] a common framework of prescriptive anti-counterfeiting practices that embraces the entire industry” but instead suggests a generic framework similar to the ISO9001 standard for quality management. I can absolutely see the logic in this suggestion - the number of different business models in the online marketplace industry (varying from, for example, the “traditional” B2C model of Amazon, through to marketplaces selling second hand products with an internal authentication process) will undoubtedly make it difficult to apply mandatory anti-counterfeiting practices across the board, whereas an overarching generic framework that helps marketplaces to improve their processes would offer some structure and focus when developing and maintaining online anti-counterfeiting strategies.
As a brand protection practitioner, I would definitely like to see something closer to standardisation (noting the practical difficulties of achieving this) and transparency in how different marketplaces tackle counterfeits. In my opinion, there are some really strong examples of anti-counterfeiting processes and strategies in the online space (Amazon's various platforms and initiatives spring to mind, as well as the updates to Meta's Brand Rights Protection offering that launched last week) but the divergence between these types of systems versus marketplaces with less robust or clear processes for tackling infringement can be difficult to navigate.
If you are interested, I would recommend reading the full report from WIPO. There are some really interesting statistics and commentary, as well as a full explanation of their research methodology.