Brands losing $74bn annually via online sellers that continue to offer fakes despite repeated warnings, finds Corsearch.

 Brand protection technology leader Corsearch has today released a whitepaper exploring the repeated sale of fakes on e-commerce marketplaces and social media platforms.

 The Three Strikes: Revisited report released by Corsearch analyses over 2.8m non-genuine listings offering fake goods and services that were removed from online marketplace and social media platforms by Corsearch in 2022.

The data reveals that:

  • A small proportion (4%) of the sellers behind these non-genuine listings are repeat infringers – the ‘worst offenders’. This small proportion of repeat infringers are responsible for a disproportionately large volume of all infringements
  • Almost a quarter (23%) of fake sales could be avoided if e-commerce platforms implemented strict policies aimed at suspending sellers who repeatedly offer fakes for sale online
  • Suspending those identified as repeatedly offering fake goods and services (i.e. a ‘three-strikes and out’ model) would reduce the level of exposure to harm that consumers face and reduce the amount of money lost annually to fakes, which totals $323bn per year according to the most recent figures.1

Corsearch’s research follows up on previous research released by the business in 2020. The latest study shows that the problem of repeat sellers has worsened in the last couple of years.

Recent legislation in Europe includes provisions intended to address this issue. The Digital Services Act is progressively coming into force in 2023 and includes provisions for e-commerce and social media platforms to suspend repeat sellers after they have received warnings.

At the intersection of reputational and regulatory risk, this legislation gives brands and e-commerce & social media platforms a great opportunity to work together to deliver the best policies and processes possible to combat trademark infringement.

 Simon Baggs, President, Brand and Content Protection at Corsearch, commented:

“It’s clear that huge steps could be taken to protect consumers and maintain trust in brands if those mis-using e-commerce and social media platforms to repeatedly sell fake goods and services were blocked from using these platforms.

 “Corsearch is committed to working closely with e-commerce and social media platforms to drive an enhanced approach. Robust action is good for consumers, will maintain trust in brands and will be good for the platforms themselves.”

 Mike Sweeney, Director & Senior Legal Counsel at Corsearch, added:

“With the Digital Services Act now coming into effect, brands, e-commerce marketplaces and social media platforms can work well together to deliver meaningful change.

 “The next few months are essential to ensuring that compliance is achieved.”