As commerce continues to shift online, the risk of counterfeit products increases – InsideSources

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The pandemic has changed the way we live in ways too numerous to count. From the way we travel to the way we work, there’s little in our economy that the coronavirus hasn’t impacted.

In e-commerce, the pandemic accelerated existing trends, such as the shift from brick-and-mortar shopping to online retail. But as with any sudden and unexpected change, there are often negative unintended consequences. With the exponential growth of online shopping, the number of counterfeit products has increased accordingly.

In 2022, the total value of counterfeit and pirated goods is expected to reach US$3 trillion, which is almost three times the amount in 2013, according to data from the Organization for Economic Co-operation and Development.

The increase in sales of counterfeit products online has caused retailers to lose a significant portion of their profits, and the National Association of Manufacturers estimates counterfeiting is causing $22.3 billion in lost income for American workers, 325,542 fewer jobs and $5.6 billion in lost tax revenue, and nearly $4 billion in lost state and local tax revenue.

As inflation worsens and the economic recovery struggles, the decline in profits from the sale of counterfeit goods has resulted in widespread economic damage to the retail industry, including layoffs of employees, brand damage from intellectual property theft and fewer incentives to renew as the fruits of that labor possibly mainly serve the counterfeiters. As is often the case, smaller companies are hit hardest because they don’t have the excess capital to invest in brand protection.

But counterfeiting isn’t just a problem for companies that lose out on revenue they would otherwise be entitled to, or for employees whose jobs could be at risk because of lost revenue. Components and parts that are manufactured without following the same rules and regulations as an authentic product can pose serious health and safety risks. This is especially true in certain industries like pharmaceuticals and automotive where the right regulations are meant to save lives.

For example, as the pandemic has progressed, we have seen the rise of counterfeit N95 masks, which are a counterfeit product that could endanger people’s lives.

Fortunately, Congress has a great opportunity to counter the rise in counterfeiting. It could pass the INFORM Consumers Act to prevent counterfeiting, which would require online marketplaces to collect, verify and disclose certain information about third-party sellers of high-volume consumer goods in order to inform consumers. This policy would help put an end to online sales of stolen, counterfeit and unsafe consumer products by providing law enforcement with the critical tools and information they need to take action against criminal counterfeiters.

And while the INFORM Act has passed the House as part of the America COMPETES Act, there is still work to be done in both houses.

In his State of the Union address, President Joe Biden called on Congress to work together to reconcile the differences between the America COMPETES Act in the House of Representatives and the US Innovation and Competition Act in the Senate to pass legislation that encourages domestic semiconductor manufacturing and the supply chain improves elasticity.

It is hoped that while the House and Senate work towards an agreement, the INFORM Act will be included in the final legislative package as it will effectively stem the flow of counterfeit goods, defend American manufacturers and protect the health and safety of consumers will .

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