The rapid digitalisation of the global economy, combined with the dominance of online shopping platforms, has fuelled a significant increase in counterfeit products across the EU. Sophisticated counterfeit networks are evolving into highly organised operations, establishing dedicated supply chains and advanced logistical infrastructures to sustain their activities. Companies should pay attention.
In 2023, French customs seized a record-breaking 20 million counterfeit items, doubling the figures from 2022. The seizure underscores the scale of counterfeiting in France, which particularly impacts the country’s health, cosmetics, and luxury industries. Across the European Union (EU), counterfeit goods account for 5.8% of total imports, valued at approximately EUR 119 billion.
A January 2024 report by the European Union Intellectual Property Office (EUIPO) revealed that counterfeiting costs Europe’s clothing, cosmetics, and toy sectors EUR 16 billion annually—5.2% of their total revenue—and results in the loss of nearly 200,000 jobs.
E-commerce is driving the counterfeit trade
E-commerce platforms and marketplaces have seen significant growth across Europe and the United States. Judicial authorities are taking notice. Platforms like Temu, with 75 million monthly users in Europe, TikTok Shop, AliExpress, and Shein—whose revenue reached $45 billion in 2023—all face increased scrutiny.
Beyond regulatory concerns, these platforms pose new challenges in the fight against counterfeiting.
In March 2024, the European Commission (EC) launched a formal investigation into a Chinese e-commerce giant for potential violations of the Digital Services Act (DSA). The inquiry targets the platform's handling of illegal or harmful products, including counterfeit medicines, food, and dietary supplements, as well as the role of influencers in promoting such items.
In the United States, another Chinese company has faced over 90 federal lawsuits since 2018, primarily involving allegations of copyright and trademark infringement. Retail leaders have also initiated lawsuits against the company in Hong Kong and Japan.
Seizures aren’t enough: breaking the counterfeit network:
Beyond addressing the seizure of counterfeit goods, dismantling increasingly complex and agile networks remains a significant challenge. These organisations have developed proprietary systems for production, supply, storage, distribution, and online promotion.
The French 2024–2026 National Anti-Counterfeiting Plan highlights a 'growing porosity' between counterfeit markets and other forms of illicit trafficking, which now share similar organisational structures and operational methods. Criminal organisations are leveraging e-commerce platforms to exponentially increase the shipment of counterfeit goods into the EU via express delivery, postal services, and air freight. This trend has accelerated in the post-COVID era, driven by the expanding digitalisation of global commerce.
The millions of parcels entering the EU often pass through automated warehouses equipped with sophisticated logistical software, complicating customs authorities’ efforts to trace these goods. Effective monitoring increasingly relies on close collaboration with e-commerce platforms.
Identifying the masterminds behind these operations presents another layer of complexity. This requires international cooperation among platforms, law enforcement agencies and counterfeiting experts, as well as specialised human intelligence sources and advanced open-source intelligence (OSINT) capabilities.
These networks frequently operate in regions where transparency around such activities is limited. According to the EU’s 2022 Counterfeit and Piracy Watch List, the majority of counterfeit products entering the EU in 2020 originated from China, followed by Hong Kong (China) and Turkey.
Dismantling these networks also entails tracing and seizing assets laundered through counterfeit sales—an incredibly challenging task given the sophisticated money-laundering techniques employed by these criminal groups.
Fake medicines, real threats: spotlight on pharmaceutical counterfeiting
Counterfeit medicine trafficking is one of the most profitable criminal enterprises worldwide, with the market valued at over USD 200 billion annually as of 20185. This illegal trade disproportionately affects antibiotics, analgesics, hormones, steroids, anorectics, psychotropics, and medications like Viagra.
Several high-profile pharmaceutical counterfeiting cases came to light in 2023. Interpol’s Operation Pangea XVI, conducted across 89 countries, resulted in 72 arrests and the seizure of counterfeit products valued at over USD 7 million.
In the United States, a USD 250 million pharmaceutical scandal exposed an elaborate scheme where individuals illegally acquired large quantities of medications, including HIV treatments. They then fabricated counterfeit labels, packaging, and documentation to make the drugs appear legitimate, registered authorised pharmaceutical distribution companies, and sold the counterfeit medications to intermediaries and pharmacies. Some bottles, falsely labelled as containing life-saving anti-HIV drugs, instead contained antipsychotic medications like Seroquel, damaged pills, or even pebbles.
Danish pharmaceutical company Novo Nordisk also reported a significant increase in counterfeit sales of its popular drugs, Wegovy and Ozempic, on online platforms in 2023.
The pharmaceutical industry is strengthening its defenses through innovative measures in response to these challenges,
In October, French laboratory Servier launched a pilot project called Securiscan. This tool enables patients to verify the authenticity of their medications by scanning a QR code on the packaging via a mobile app. Currently being tested in the Chinese market, this tool will be assessed by year-end for potential global deployment.
Other major pharmaceutical companies, such as Sanofi, are leveraging specialised laboratories to detect and combat counterfeit drugs.
What companies can do
With counterfeiting operations rapidly evolving, companies must stay vigilant. This means developing a transnational strategy that leverages specialised human intelligence sources, advanced open-source intelligence (OSINT) capabilities, and customised data-processing technologies.