Distinguishing Counterfeit From Authentic Product Retailers in the Virtual Marketplace

Abstract

Product counterfeiting is a large and growing crime that has many forms of victims, from consumers and corporations to governments and societies. Contributing to this growth, the Internet offers a means by which counterfeiters can easily apply their illicit trade around the globe with relative anonymity. However, little is known about the ways in which counterfeiters market their products online and whether and how they can be distinguished from authorized retailers selling authentic product. In this research, we empirically explore authorized and counterfeiter business-to-consumer websites for a luxury apparel maker and an audio electronics company. Building on the extant literature, we statistically distinguish the websites based on effective website design features, including interactivity and navigation, functionality, marketing, and security. We find that counterfeiter websites are different from authorized retailers on many key attributes. Additionally, some of these differences hold between industries, whereas as others are industry specific. We discuss these findings relative to advancing ideas on how counterfeiters target victims, conceptualizing crime and place, and opportunity for e-displacement. We conclude with a brief summary of some implications for the detection and prevention of these crimes by law enforcement, industry, and consumers.