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        One of the most dangerous problems that is associated with conducting international trade, is dealing with counterfeit goods. Counterfeit items (typically known as pirated goods) are cheap goods individuals make which have low production costs, but are in very high demand. These goods can include low tier items such as shoes and backpacks, to more significant items like tickets to a football game and computers. Most people are tempted to purchase counterfeit goods since they are sold very cheaply, but, this illegal business is officially run by international criminal networks.  

      According to the reports conducted by The World Customs Organization, they have discovered that counterfeit items that have been sent to at least 140 countries since the year 2008. Plus, the OCED has reported that counterfeiters make roughly around $250 billion dollars in sales per year. They can make a lot of money quickly and efficiently, since they both create deceptive businesses (which tend to supply real goods) to hide their distribution of the counterfeit items circulating the market, and they scan out weaknesses in border security to smuggle in goods. The costs associated with counterfeiting include jeopardizing legal businesses (by having the counterfeit goods exceed the demand of legal goods), more assets being spent to create anti-fraud devices to check for criminal behavior, and massive accounts of either illnesses or death. These last two instances occur when counterfeiters produce medicinal product which claim to treat illnesses, but instead are embedded in cheap harmful ingredients like plastic or mercury.

     Fortunately, there are countries that are starting to wage a fight against this nefarious practice. Thosapone Dansuputra (the Intellectual Property Department director-general of Thailand), stated in June 2017, that he was planning to get rid of six locations in Thailand that specialized in selling pirated goods. This announcement was made in accordance with an order given by Prayut Chan-o-cha (the Prime Minister of Thailand) to increase the effort of getting rid of counterfeit goods in Thailand. While a coalition of Thai armed forces (consisting of the Royal Thai Army, the Royal Thai police, the State Railway of Thailand, and many others) were successful in crack downing the shops in the Rong Klua market area, they didn’t have one specific method to accomplishing this task. On the one hand, they used lenient tactics such as displaying the crackdown against the counterfeiters online. At the same time, they also used harsher tactics such as threatening to revoke their lease contracts. Either way you look at it, Thailand (and the rest of the world) has a long way to go before they can successfully trade in the global market without counterfeiting intervention.  

References:  http://www.unodc.org/toc/en/crimes/counterfeit-goods.html

                       https://insideretailthailand.com/2017/06/official-vows-wipe-pirated-goods/

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Comments

  • Great topic selection Arieh. Because of my undergraduate background and the related business experience I had after that, I have been trying to understand more about the digital piracy and content theft over the internet in general, which I think, at some level, is a “digital” extension of counterfeiting. Considering the burst in social media and smartphone usage, these days, it has become almost impossible to even know who the original publisher is, let alone attribute any kind or form of compensation to them. In comparison with physical goods, where as you described it, the overall counterfeiting operation is a lot more complex and organized (despite being illegal), the distribution of illegal digital content in most cases is a copy/paste away. Almost anyone can easily publish/watch/read/share copyrighted digital content to and from anywhere in the world. It is a borderless, instantaneous activity that spreads out rapidly. I’m not talking about the pirated movies and music alone. Due to the aforementioned explosion in social media and smartphone usage, a lot of new media publishing/distribution channels have been created. As a result, users that are engaged in different social media channels have started to create and share authentic and creative digital content more and more. Yet, the mechanism necessary to protect the illegal distribution of that content is almost nonexistent, even when sharing in those same channels. Many individuals and internet companies around the world make money every day using content created by other people (without their permission) just because there are no (or very slow) systems that can identify the original publisher. Considering how technology is evolving, it is interesting to see what is going to happen in the future regarding this matter.

     

  • Interesting Thai initiative. You are right: counterfeiting is hard to tackle. An also interesting initiative this time from Alibaba earlier this year in using data and analytics to fight against counterfeits (https://www.cnbc.com/2017/01/17/alibaba-louis-vuitton-samsung-tackl...).

    Alibaba, Louis Vuitton, Samsung and others tackle fake goods with big data
    Alibaba has partnered with brands including Louis Vuitton, Swarovski and Samsung to launch a "Big Data Anti-Counterfeiting Alliance"
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