Today’s counterfeiters are bold, tech-savvy, and shockingly immoral
In 2019, Netflix released a docuseries called Broken, a surprise hit that profiled the ways in which the negligence, apathy, and malevolence of ‘bad actors’ throughout the global supply chain have harmed countless innocent people around the world. Spanning just four episodes, Broken was packed with emotional right-hooks, covering everything from infants being killed by shoddy furniture to beautiful Malaysian villages drowning in a sea of single-use plastics.
The docuseries’ premier episode, Makeup Mayhem, focused on the perils of counterfeit cosmetics. Knockoff eyeliner may not seem as severe as the topics mentioned above, but the carcinogens, rat feces, horse urine, and other concerning substances which have been detected in cosmetics from online stores provide a glimpse into a serious and worsening public health issue. “It’s like the wild, wild west online,” says a private investigator who handles anti-counterfeiting cases as the show’s theme song starts to play. “I mean, the problem is just out of control.”
“It’s like the wild, wild west online. I mean, the problem is just out of control.”
For many of the people who watched it, Makeup Mayhem was the first time they thought critically about the authenticity of the products they purchase online, and it wasn’t a moment too soon. The fact that thousands of people have paid for the privilege of putting animal feces on their faces may seem alarming enough on its own, but the reality is that modern counterfeiting extends far beyond cosmetics and threatens human health and safety from multiple angles.
When most people hear the word counterfeit, their minds immediately jump to one of two things: money or luxury goods. While it’s true that these are among the most prominent categories of counterfeit items, the rise of online shopping means that things like fake makeup and medicines deserve a greater deal of scrutiny from today’s shoppers.
All counterfeiting is inherently deceptive and succeeds by abusing the trust of its victims. However, there is a fundamental moral gulf in the outcomes precipitated by different kinds of counterfeiting. At the end of the day, the consequences of somebody handing a counterfeit bill to a gas station attendant or purchasing a fake Gucci handbag pale in comparison to what can happen when people unwittingly put counterfeit substances on their skin or inside their bodies.
People in developed countries aren’t used to thinking about these things. In the twentieth century, long-established supply chains operating in a robust ecosystem of brick and mortar stores offered few opportunities for would-be counterfeiters to enter into legitimate marketplaces. However, the eruption of e-commerce in recent years has upended this state of affairs.
Now that more shopping carts are virtual rather than physical, consumers are forced to judge the safety of the products they buy based on insufficient information and unclear context clues composed of nothing more than pixels on a screen. Generations of relative safety from counterfeits has led to complacency on the part of consumers and an atrophy of the cynical instinct that makes one stop and ask, Am I getting scammed?
Consumers are forced to judge the safety of the products they buy based on insufficient information and unclear context clues composed of nothing more than pixels on a screen.
The shift to digital marketplaces has painted millions of bright targets on the backs of these shoppers, and the truth today is that many people across the developed world are indeed getting scammed. In fact, counterfeit goods are estimated to account for an astounding $1.8 trillion of global GDP and 3.3% of world trade – numbers which are only projected to grow in the coming years. Because developed nations constitute a greater fraction of global wealth than their developing peers, counterfeiters are incentivized to target newly vulnerable consumers in places like the United States and the European Union with the same tactics that have already been thoroughly tested in developing markets.
Most significantly, wealthy economies must prepare themselves for the horror show of widespread counterfeit pharmaceuticals, an abhorrent problem that people in the developing world have been grappling with for years. Incredibly, tens or hundreds of thousands of people throughout the global south are estimated to die each year due to fake malaria drugs, and roughly 10% of all medical products sold in developing countries are estimated to be counterfeit.
These ghastly numbers are possible because the national economies in these regions often exhibit some of the same ‘wild, wild, west’ characteristics that allowed the budding digital marketplaces profiled in Makeup Mayhem to be so easily exploited. This dynamic suggests that the ease and convenience gained by transitioning to online shopping comes with an enormous potential tradeoff in human health and safety that is only just beginning to manifest itself in the developed world.
The ease and convenience gained by transitioning to online shopping comes with an enormous potential tradeoff in human health and safety that is only just beginning to manifest itself in the developed world.
Counterfeiters have become skilled at finding pathways into legitimate pharma supply chains, with fake medicine comingling with legitimate products at the pill, packaging, and pallet level. For example, a 2014 study determined that more than 60% of sildenafil (the active ingredient in erectile dysfunction medications) consumed in the country was counterfeit. Similarly, over a million fake Viagra pills were discovered by Los Angeles customs officials in just one shipping container last year. In another European case study, it was estimated that 1.5 million counterfeit Xanax tablets were consumed in the UK during a 20 month span between 2015 and 2017, leading to mass hospitalizations and at least 20 deaths. Ultimately, it is thought that less than half of counterfeit medicines are identified as such prior to consumption.
Unsurprisingly, 2020 took these existing trends and exacerbated them to an unfortunate extreme. The COVID-19 pandemic has presented an enormous opportunity for counterfeiters who have no qualms about cashing in on human suffering, and there have already been numerous examples of counterfeit PPE, fake COVID tests, and fraudulent vaccines being sold to desperate governments, hospitals, and individuals around the world.
The COVID-19 pandemic has presented an enormous opportunity for counterfeiters who have no qualms about cashing in on human suffering.
Unfortunately, it is clear that there will always be somebody willing to do the wrong thing to make a quick buck, no matter how immoral and reprehensible. It is equally clear that online shopping is the way of the future, despite the risks it poses. With this reality in mind, we must ask ourselves what practical steps we can take today to save lives and curtail the most dangerous types of counterfeiting.
It is impossible to prevent counterfeiting from ever occurring, but it is possible for anti-counterfeiting solutions to stay ahead of criminals. If the barriers to would-be counterfeiters are high enough, they will be disincentivized from pursuing their scams and will not introduce as many dangerous goods into marketplaces. This cat and mouse game begs an important question: what would the perfect anti-counterfeiting solution look like?
For starters, it must be inexpensive. Brands and businesses need to be able to justify the cost of adopting this solution, which will be easier if it comes at a reasonable cost. Moreover, if we are serious about saving human lives, this tool needs to be affordable to people living in all economies, including developing ones. This same goal – universality – informs our next criteria, which is ease of use and deployment. To be truly effective, this tool has to be user-friendly and able to be integrated into existing supply chain infrastructure with minimal fuss.
Beyond these prerequisites, we must obviously also consider effectiveness. To provide a near-insurmountable barrier to counterfeiters, new solutions must be much more secure than existing tools like barcodes and RFID tags. In addition to this, products must be covered throughout their entire supply chain journey, from manufacturing to the end consumer. Anything less would leave holes big enough to drive a counterfeit Lamborghini through.
C2Sense has produced its own smartphone-based anti-counterfeiting solution, called AuthenTags™, which we believe meets these requirements. AuthenTags are cost-effective, semi-covert or invisible to the naked eye, and use proprietary chemical formulations to provide product security at the molecular level. Whether or not this is the solution that ultimately alleviates our global bout of medical mayhem, one thing is certain: both the health and finances of people across the world will continue to suffer unless something dramatic is done.