Chanel Goes After Counterfeiters

Discussion
Sep 22, 2011
George Anderson

Counterfeit goods represent a $600 billion problem across the globe and the practice costs businesses in the U.S. up to $250 billion a year, according to the International Anti Counterfeiting Coalition. Brands and law enforcement agencies have continued to fight counterfeiters, but with billions to be made, it doesn’t appear as though the practice is coming to an end anytime soon.

In the latest move to protect its own brand, Chanel filed a suit charging 399 websites of selling counterfeit items. It also alleges these same sites are using its name to generate search engine results that lead consumers to buy fake goods. It pointed to sites with domain names such as chanelOnline.com and chanelhandbags-outlet.net as being misleading.

The law firm representing Chanel is currently handling similar cases for Tiffany and Louis Vuitton Malletier. The Tiffany suit, according to an Associated Press report, is against 223 sites, while Luis Vuitton targets 182.

A RetailWire poll in October of last year asked what group had the greatest ability to reduce counterfeit products on the market. Consumers (35 percent), law enforcement (20 percent) and retailers (20 percent) received the most votes.

Discussion Questions: Are brands and retailers fighting a losing battle against counterfeits? What long- and short-term industry responses to the problem would be most effective?

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10 Comments on "Chanel Goes After Counterfeiters"


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Tony Orlando
Guest
9 years 7 months ago

Anyone who has been to New York City can buy fake everything right off the street from a number of carpetbaggers, who will sell a fake Rolex, Coach purses, and anything else they get their hands on. It is impossible to stop, and occasionally the Feds will make a bust now and then, but I don’t see how to control it.

Bob Phibbs
Guest
9 years 7 months ago

This is a perfect example of why “buying on the web” and getting a great “deal” comes with a caveat. Are people buying these knowing they must be fake just to seem smart to their friends? My guess: yes.

Ryan Mathews
Guest
9 years 7 months ago

Counterfeits have existed almost as long as originals, so the battle — if not losing — is at the very least endless.

As far as effective measures go, that’s also hard to say. Just as one counterfeiter is put out of business a dozen others seems to pop up.

Trade regulation, constant vigilance and a track record for prosecution help, but in the end — as long as there is money to be made — you aren’t going to stop people from trying to counterfeit goods.

Doron Levy
Guest
Doron Levy
9 years 7 months ago

Brands, especially luxury brands, know how juicy their market is, so it ‘behooves’ (to use a luxury term) them to take care of business and shut out counterfeiters. Is it a losing battle? Oh yeah. Until we see some more strict regulation from China, the black market will continue to thrive as consumers with no money (or with money?) want those high-end brands. Higher-end goods have an arsenal of technology to prevent, or at least differentiate, counterfeits. The question is, are you going to go to all that trouble showing off the hologram or RFID chip to your friends at the soccer tourney or cocktail party?

Gene Detroyer
Guest
9 years 7 months ago

Chanel is making a wasted effort. The problem is not the websites. The problem is the consumers. They want counterfeit products. And as long as they want them, there will be places that sell them.

What is terribly ironic about this situation is that when someone who can well afford a Chanel handbag carries a counterfeit, everyone will believe it is real. When someone who cannot afford it carries one, no one believes it is real, even if it is.

We are a very interesting society.

Bill Bittner
Guest
Bill Bittner
9 years 7 months ago
I don’t know the answer, but it should not be hard to determine how counterfeit goods get into the supply chain. I imagine a lot of it can be traced to “alternative sourcing” e.g. diverting, auctions, and other non-traditional means for acquiring merchandise. The technical answer for stopping counterfeiting is serialization. Whether you use a barcode or an RFID tag, serialization promises to make it possible to trace products through the supply chain. A product that pops up on an online auction without a certifiable pedigree is obviously counterfeit. A simple online check of the serial number should reveal the hoax. But the interesting question in all this is whether the brand holder should really care? No one really thinks the counterfeit Rolex they bought for one tenth the normal price is the real thing. But all the talk and swagger that surrounds the purchase only enhances the mystique of the brand. Maybe brand owners should look at counterfeits as a form of advertising. After all, imitation is the greatest form of flattery. Do high… Read more »
Dennis Serbu
Guest
Dennis Serbu
9 years 7 months ago

Simple answer: Unless negative behavior is challenged, then it becomes a tacit approval. The various manufacturer associations should be funded by members to vigorously defend their copyrights and trade names. One company going after counterfeiters is not efficient, but 10 companies in an association can be a force multiplier. This is a criminal act in many cases and could result in seizure of assets and at least some recovery. If you do nothing, you get what you deserve. It won’t stop it completely, but it will add a consequence and eventual modification of behavior for at least some.

Mark Baum
Guest
Mark Baum
9 years 7 months ago

Interesting comments. Of course, counterfeiting is almost impossible to stop — and occurs in myriad product categories, with luxury goods toward or at the top of the list. As as in many criminal endeavors, the counterfeiters become as sophisticated as the attempts to stop them. That said, branded companies should never quit in the battle against counterfeiting. Although a Sisyphean task, maintenance of brand promise and integrity is the most important component of consumer loyalty.

Cathy Hotka
Guest
9 years 7 months ago

This is a terrible situation and their efforts to address it are to be commended. But consumers have a responsibility here, too…a phony “Chanel” bag for $35 is obviously a fake.

Jerry Gelsomino
Guest
9 years 7 months ago

I won’t go out on a limb to say it’s a losing battle, but is there a better use of time and money? For the classes I am teaching, we’ve re-read Wikinomics by Tapscott and Williams. The sub-title is ‘How mass collaboration changes everything.’ In the book we learn how some companies are thinking different about competition, copy companies, IP protection, etc. Could brands look to engage with those who copy their products, maybe starting with deleting the label of ‘counterfeiters?’

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