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The Economics of Counterfeiting |
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What's the Big Deal and What We Can Do About It
The big deal is that counterfeits are no longer just about profit losses for a few companies. They are about some of the largest issues we have to deal with today - issues like trust in corporations, public health & safety, and globalization. There are no limits on the fake products being produced today and no limits on where they are sold. The vitamins we eat, the cars we drive, the components in our computer, the footballs we kick, all can be or contain fakes.
Clearly, the economics of counterfeiting are on the side of the counterfeiters and are unlikely to change anytime soon. Just as clearly, law enforcement alone has its limits. The fight against counterfeiting has champions in the producers of the authentic products and these champions have been struggling against counterfeits of their own products for years with mixed results. In some areas, the fight has become so extreme that huge sums of money have been spent at the same time that huge amounts of revenue have been lost. Some favorite targets of counterfeiting now assume no cover from counterfeiters and must work that reality into product forecasting. Companies always assume a product will generate less revenue once patent protection is gone, but in the case of counterfeits patents offer no protection from competition from day one.
It is clear that enforcement alone has a long, some would say impossibly long, road to travel in stopping counterfeiting. However, the fact that the counterfeiting industry is so demand driven implies there is one direct way for each and every individual to play a part in ending counterfeiting. We must stop knowingly buying them.
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