MarkMonitor Study: Fake Websites & Counterfeit Goods Online

January 19, 2011 § 1 Comment

MarkMonitor, the global leader in enterprise brand protection, conducted a study in 2010 of 22 brands with respect to online counterfeiting and piracy. The products varied across many categories including prescription drugs, luxury goods, music, films and athletic gear. The results of the study were shocking to say the least. The MarkMonitor study revealed that digital piracy and counterfeit goods websites generate more than 53 billion visits per year. Even more staggering, sites that sold counterfeit goods, including prescription drugs and luxury goods, generate more than 92 million visits per year.

Why aren’t these sites shut down? According to the study, 67 percent of sites suspected of hosting pirated content and 73 percent of sites categorized as “counterfeit” were hosted in North America or Western Europe, BUT they operate across multiple national boundaries. This makes it harder for law enforcement to shut the websites down, but it is not impossible.

Our initial thoughts are, do music and film lovers who visit these sites know that they are illegally downloading music? Do shoppers know they are buying a counterfeit product? It is hard to know for sure, but what this study does tell us is that these websites have extremely high volumes of traffic. MarkMonitor even estimates the worldwide economic impact of online piracy and counterfeiting is $200 billion annually. This is why we work hard to educate consumers about piracy and counterfeiting. Not only do we want to protect consumers, we also want to make consumers aware that supporting these sites hinder economic growth as well as the job market.


Counterfeiting and the Butterfly Effect

May 21, 2010 § Leave a comment

If a butterfly flaps its wings in some dank Manhattan alleywhere tourists trade crumpled bills for counterfeit handbags, will the breezecreated by the insect cause a tornado in Texas?

Now, you probably expect to hear this type of question late in the evening at some artists commune, but while it may seem a bit off the trodden path, the question actually has to do with a theory that is very relevant to our anticounterfeiting work known as the Butterfly Effect.

The Butterfly Effect is a way of explaining unpredictable behavior in otherwise predictable systems. As with all theories, it can seem quite complex, but at a more simple level it tries to make sense of how slight differences in a system’s original state can cause a plethora of different outcomes, as in “Would you say that I have a plethora of piñatas?”

For instance, when a raindrop lands on your forearm, the direction that it will fall depends on a number of factors. If a single hair is pointing in one direction, the drop will slalom in a certain way, but if that same hair is moved just a bit, the water will trickle in a completely different direction. There are many factors that determine the outcome, even in a smaller “system” like our droplet’s whose course is also affected by things like skin temperature, and the pulse of the vessels just beneath the dermis.

Unless you’re wearing a coat of body paint for an Avatar-theme potluck, raindrops shouldn’t be a concern. But, we should be worried about what goes into our larger personal “system.” Just like a particularly coarse arm hair, if you include a fake in your mix, it will have a significant effect on those around you.

If you willingly sport the cheap, oozy leather of a fake handbag, it is crucial to know that the consequences reach far beyond a poor aesthetic choice. When you spend money on a fraud, it encourages whoever is cooking the poison to keep the fire burning. When you buy fake, the message to the criminal manufacturers and distributors is clear: make more and continue with the abuse.

If your “system” has a corrupt set of original factors, it will alter the way you act with others, and just like a droplet sitting on top of a coarse arm hair, a counterfeit in your life will change your outcomes.

As you recall the ground-breaking research of Dan Ariely and his colleagues that demonstrated how wearing fakes makes a person less likely to behave ethically, you understand how important it is to pick the right factors in your life and exclude the fakes.

So, consider two things: (i.) each item you include in your daily routine has an effect on the outcome of your day, and (ii.) your behavior creates a domino effect that influences the behavior and experience of countless others.

With so many of our interactions, events, goings-on, and general high jinks affected by unseen factors and shaped by those items we have in our lives, why risk those around you knowing that fakes poison a system the very moment they enter it.

The purchase of counterfeit goods perpetuates abuse. And it puts your friends and family in jeopardy as well. It would be easy to write this off as an insignificant, unlikely slice of sensationalism, but I’m not talking about an average person transforming into some thug because they bought a fake broach. This is about behavior that is slight, occurs in increments, and is insidious. This isn’t blunt force behavioral trauma. The change is gradual and deceptive. So make your choices wisely.

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For those wearing fakes, a new study asks just exactly who’s fooling who.

April 13, 2010 § Leave a comment

Compared to the long list of reasons people use to justify counterfeit purchases, the waiting list for the iPad is tiny.

Certain buyers who aspire to the lifestyle that the brands symbolize will turn their coin purses inside out for fakes.

Others choose to buy the bogus baubles to get a little jolt from doing something illegal, which is as impressive as a low-rent adrenaline junkie wearing water wings in a wave pool.

There couldn’t be a worse way to emulate an authentic lifestyle than to buy a counterfeit version of it.

Faux frocks and sham goods offer a connection to authentic luxury that’s as sturdy as a balsa wood bridge strung across a gorge in an action flick. It’s all splinters and splashdowns.

The number of ways people are able to justify this kind of behavior is frustrating in its endlessness and endlessly frustrating. But if we boil it down to a single characteristic, the reason people are willing to go to great lengths to buy a fake, to wait in dank rooms that double as rodent latrines and stroll around back alleys, is because they are lazy.

It’s easier to fill that void of self-esteem with a fake than to earn an authentic piece of craftsmanship.

But the easy route is also a dangerous one. While we know counterfeitsing hurts many people who manufacture and sell the goods, a recent study has shown that buying fakes can damage the buyer as well.

And it’s not just a question of Karma.

Back in December, the NY Times Magazine recapped the best concepts from the previous year in its annual “Year in Ideas” section and mentioned two of our friend Dan Ariely’s papers.

One of his works, The Counterfeit Self, written with fellow psychologists Francesca Gino and Michael Norton (from the Universities of North Carolina and Harvard, respectively) tackled how wearing counterfeit items can alter behavior.

The research explained how wearing a fake can actually make a person act less ethically.

Put briefly, after subjects donned designer sunglasses that were selected from boxes labeled ‘counterfeit’ and ‘authentic,’ they were asked to perform tasks in situations where cheating would be easy.

It turns out that high percentages – greater than 70 percent – of the participants who knowingly wore the fake glasses cheated.

Speaking to the New York Times Magazine, Dr. Gino summed up the phenomenon quite well: “When one feels like a fake, he or she is likely to behave like a fake.”

If someone is aware of the abuse that counterfeiting causes and buy fakes anyway, it’s fair to say that their ethical tank that is already dangerously close to E. As this new study suggests, if they’re also wearing the impostor gear on a regular basis, it’s definitely time to pull over and fill up, or else they’ll end up stranded in desert with nothing but a fake parasol for cover.

Then again, a little time baking in the sun might do them some good.

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New study finds that counterfeits may not affect the brands they imitate, but loses sight of the larger problem

December 2, 2009 § Leave a comment

While it seemed as clear as a Van Cleef gemstone that the motivation for buying luxury items was their artistry and quality, a professor at MIT has written a recent paper which uses counterfeit goods to reconsider these impulses.

In “Rethinking Brand Contamination,” Renee Gosline weighs the basic desire to own a high-quality item against a sociological theory known as “conspicuous consumption,” a 19th century concept developed by Thorstein Veblen that suggests buyers are motivated to mark their social status with certain goods.

Pay for play. Keeping up with the ever-fashionable Joneses. Call it what you will, but the skinny of Veblen’s theory is we buy things to associate with certain groups and distinguish ourselves from others.

By considering both forces, Gosline’s goal was to determine how consumers assess luxury brands. In her study, she showed subjects two sets of pictures that depicted either authentic luxury or fake luxury. The first collection showed stationary handbags, sitting alone on a shelf, while the second collection captured the bags held by a person in public. Her study measured both the confidence of the subjects in determining whether the item they saw was bona fide and how much they were willing to pay for it.

When consumers observed the first group they were less confident about their ability to judge the authenticity of an item and weren’t willing to pay top dollar for it. With the second group of photos, where the items were shown in a social setting, the same group felt more secure and was willing to pay more.

Gosline, who teaches at the Sloan School of Management, concluded the subjects were more confident because they were matching the objects with their preconceived notions of who would own it.

“Basically these consumers look at the person, the setting, and determine the authenticity by seeing if the person’s image corresponds with the image they have of the brand,” Gosline said.

The research suggests a dual motivation for buying luxury products and may indicate, as the press release states, that for luxury firms looking to expand brand cachet, quality alone may not be enough.

But let us not forget that concern for brand durability, quite frankly, is, at best, in issue secondary to the abuse of human rights that occurs in the production of sham products.

Additionally, in the midst of all the research and hypothesizing, it’s easy to lose sight of the origins of luxury. It all began in early 19th century ateliers with a profound desire to make high-quality goods. Sure, the industry has evolved, but it seems that the basic motivation to own a piece of finery remains the same. Though, others might say that lacking the staggeringly complex human psyche, of which Veblen’s theory may be a part, we wouldn’t have this art or this desire to begin with. Gosline manages a fine study of this.
It’s become a question of what came first: the Lalique chicken or the Faberge egg.

So, while we appreciate Ms. Gosline’s rigorous research and commend her for further illustrating the nuanced nature of human motive, we suggest that her next consideration never loses sight of the larger concern: humanity.

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When weighing online offers, consumers feel functionality is more important than potential risks, even as they consider the danger of counterfeits

July 13, 2009 § Leave a comment

It’s no surprise in-the-know shoppers are motivated by quality, functionality, and competitive pricing. We want the best at the right price. And believe it or not, this type of motivation is good for both sides of a sale. At Bazaar, we hope all parties will be happy and, if authentic goods are in the mix, we think they can be. When you’re dealing with the real McCoy – genuine luxury or bona fide goods – everyone is motivated by the same thing: distinction. It is about excellence. If one side is eager to purchase it and the other produces it, then everyone ought to go home from the carnival with a stuffed bear, right? Well, ideally, yes, but it’s clear this isn’t always the case. So what’s the deal?

Fakes are the deal. Cheap, potentially dangerous, but functional fakes. A new report from OpSec Security suggests as counterfeiters put out “increasingly, better quality fakes” (the so-called “AAA-quality” fakes) with lower prices, a significant number of the survey respondents came to believe the perceived functionality of the sham goods outweighed any safety risk and they were willing to forego safety entirely for price. Fakes alter the landscape of the marketplace for the worse. As the findings of this study indicate, with counterfeit goods in the mix, nothing is safe. Not even common sense.

Some statistics from the study:

• 80% of respondents professed to never shopping for fakes
• 66% of respondents overcame their initial aversion and
indicated a willingness to purchase convincing counterfeits,
although approximately the same percentage recognized
the online offers as fakes
• 81% of respondents who were aware of the dangers of
counterfeits considered product functionality as more
important than potential risks when weighing online offers
• As expected, almost all respondents (90%) stated price as a
driving force for counterfeit purchases

So where’s the disconnect? When an item looks identical to an authentic piece, it’s easy to forget the purveyors of sham goods aren’t concerned with safety. They don’t care about brand integrity. They leave that to the legitimate businesses they rip off. They’re only able to produce cheap, dangerous goods because other groups are devoted to cultivating authentic products. The fake trade is the worst form of parasitism, because it injures every party involved: it undercuts the earnest creative efforts of those that it exploits, and it stands to injure those who buy unsafe impostor items, whether aware or unaware of the fakery.

The problem brings to mind a line from Thoreau’s Walden, to paraphrase: ‘that person is richest whose pleasures are the cheapest.’ Though we understand that HDT uses this elegant metaphor to suggest a simpler life, where the fake trade is concerned we couldn’t disagree more strongly with the literal terms of the statement. Sham goods may be cheap, but only because they’re hollow and harmful, and those qualities are not two that we associate with a full life. And though it’s an interesting moment when the author of one of the finer articulations of austerity and self-reliance has his words applied to material goods, at its core, Henry David’s famous sojourn shares its raison d’etre with it is a celebration of authenticity. So, just as Thoreau calls for a self-reliant and simple existence, we encourage our readers to seek authenticity in their own lives.

We know for certain it doesn’t begin with fakes.

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