The Alliance for Gray Market and Counterfeit Abatement (AGMA), a non-profit organisation focused on intellectual property (IP) protection for the high-tech industry is warning that the counterfeit and illicit market in It is getting out of hand.
The Alliance has issued a report titled, “Brand Protection Insights from Industry Leaders in Grey Market, Counterfeit and IP Fraud Mitigation”, which spotlights the trends and challenges related to counterfeit, fraud, grey market risk and prevention, and supply chain security that are impacting the high-tech sector.
The report notes that E-commerce has been on a rapid growth trajectory, providing a large conduit for fraud. Fraudsters are savvier, sharing information among each other and producing counterfeit at an accelerated pace. Brand protection programs are being impacted in ways they never imagined, with increasing scope and scale. Mitigating counterfeits, reducing channel grey market and preventing various fraud are more crucial to brand survival than ever.
John Solheim, principal research consultant at FiveBy Solutions which is part of the alliance said that while practitioners of preventing fraud risk and grey market have been at this for several decades, this year we see new threats emerging that make companies realise the need for upping their game and deploying more targeted expertise.
Involved in the report were participants included some of the largest and most influential brands in the world Cisco, De La Rue, Hewlett Packard, Hewlett Packard Enterprise, IBM, Juniper, Microsoft, Tech Data, and Texas Instruments.
Sherri Erickson, director at De La Rue said that the dynamics of the global marketplace are evolving in unprecedented ways, and we wanted to understand how industry leaders might be seeing the need to think of their brand protection programs, technologies, partnerships and businesses differently.
The report notes that the capabilities of counterfeiters are on the rise. Counterfeiters and fraudsters are expanding into new markets, while they continue to advance their capabilities as fast or faster than brands can address them through current programs and technologies.
The pandemic has expanded market vulnerabilities. COVID-19 has introduced both direct and indirect impacts on the way the global market purchases and sells goods, and the scale at which counterfeit and illicit trade is propagated.
Trade has got a lot more complicated. GDPR and geopolitical issues involving trade conflict are contributing to increased complexity and adding more obstacles to the distribution of legitimate products into certain regions. At the same time, these issues are limiting investigation capabilities and global brand protection program effectiveness.
Independently, these issues add complexity to thwarting counterfeit and illicit trade. Collectively, they represent the need to rethink and re-engineer brand protection programs altogether.
Participating brand protection leaders together identified four trends they expect to have an impact on the industry at large, their organisations and their roles, either directly or indirectly. These trends include:
- Corporate responsibility initiatives: Surveyed AGMA members broadly support and are focused on attaining sustainability, carbon-neutral goals and fair-trade practices, and are beginning to push these requirements out to their supply chains.
- The Internet of Things (IoT): The IoT presents challenges and opportunities for brand protection leaders to thwart bad actors before they take advantage of vulnerabilities by introducing malware, exploiting systems, accessing data and disrupting business.
- Refurbished devices: Study participants categorically agree that the refurbished device channel has historically been at high risk for fraud, the introduction of counterfeit, and security-compromised technology – a risk that is likely to grow.
- Right to repair legislation: While device manufacturers are increasingly concerned with pending legislation that could impact the management of device repairs, most do not yet have plans or solutions in place to address it when it becomes law.
- Additionally, technology trends sparking interest from survey responders include big data and analytics, automated monitoring and removal services, blockchain, modular customization, and intra-component communication.