USTR highlights fake pharma in Notorious Markets report

The 2024 edition of the US Trade Representative's Notorious Markets List has arrived, identifying 38 online and 33 physical markets that are accused of involvement in "substantial" trademark counterfeiting or copyright piracy.

The online sources taken to task include a roster of usual suspects – including China-based e-commerce and social commerce markets Taobao, DHGate, and Pinduoduo and cloud storage service Baidu Wangpan – but also features Douyin Mall, owned by ByteDance, for the first time.

Among the piracy trends highlighted in the report is the prevalence of cyberlocker sites – hosting and content storage sites that are used to facilitate the storage and distribution of pirated content – and 'bulletproof' Internet service providers (ISPs) that often explicitly advertise leniency in allowing their customers to upload and distribute infringing content.

When it comes to counterfeit goods, it once again highlights the role of social media influencers who share posts linking to fake products as well as fraudulent advertisements linking to fraudulent websites that mislead users into unknowingly purchasing knock-offs.

"However, this year many e-commerce and social commerce platforms took solid steps toward initiating additional anti-counterfeiting practices," says the USTR in the report.

Those measures include educational campaigns, increased identity verification requirements, and faster and more transparent notice-and-takedown processes, in some cases using artificial intelligence-powered tools.

Among the physical markets, USTR has identified seven in China that are known for the manufacture, distribution, and sale of counterfeit goods, along with locations in Argentina, Brazil, Cambodia, Canada, Colombia, India, Indonesia, Kyrgyz Republic, Malaysia, Mexico, Paraguay, Peru, Philippines, Russia, Thailand, Türkiye, UAE and Vietnam.

"Counterfeiting and piracy is a shared global concern, harming people not just in the US but also in other countries, said USTR Katherine Tai. "I urge our trading partners to join with us on the fight against counterfeits and pirated goods," she added.

Focus on fake medicines

As usual, the report zeroes in on a particular issue, this time the growth in illicit online pharmacies and the dangers of counterfeit medicines, including the health and safety risks.

The report cites data from the Alliance for Safe Online Pharmacies (ASOP) which suggests that 20 new illicit pharmacy websites are created every day and that 96 per cent of an estimated 35,000 online pharmacies worldwide operate in violation of the law and are often hard to distinguish from legitimate sites.

It also notes that in fiscal 2023, Customs and Border Protection (CBP)  seized more pharmaceutical items than any other single category of counterfeit good with over 1.5m items seized.

"Consumers must continue to be made aware of the risks associated with purchasing medications through illicit unlicensed online pharmacies and strong enforcement measures must continue to be implemented to combat the growing threat of counterfeit drugs," says the report.

USTR also highlights several successes from the past year involving efforts by and collaboration among the US government, foreign governments, and stakeholders. One example is an operation that led to the closure of Vietnam's Fmovies, said to be one of the world’s most popular websites for streaming pirated copies of popular movies and television shows that has been included in the Notorious Markets List since 2017. 

Other examples include major piracy and counterfeit enforcement operations by Brazil, Kuwait, and the Philippines.

The document was warmly received by US trade organisations, including the American Apparel & Footwear Association (AAFA), although once again the omission of US-based platforms from the list has come in for criticism.

"Given the significant role that some domestic platforms play in facilitating the sale of counterfeit goods, we believe it is crucial to ensure that the report reflects all markets – regardless of their geographic location – that contribute to the proliferation of these illegal products," said Steve Lamar, AAFA president and chief executive.