Counterfeits on Darknet Markets: A measurement between Jan-2014 and Sep-2015

Abstract: Counterfeits harm consumers, governments, and intellectual property holders. They accounted for 3.3% of worldwide trades in 2016, having an estimated value of $509 billion in the same year. While estimations are mostly based on border seizures, we examined openly labeled counterfeits on darknet markets, which allowed us to gather and analyze information from a different perspective. Here, we analyzed data from 11 darknet markets for the period Jan-2014 and Sep-2015. The findings suggest that darknet markets harbor similar counterfeit product types as found in seizures but that the share of watches is higher and lower for electronics, clothes, shoes, and Tobacco on darknet markets. Also, darknet market counterfeits seem to have similar shipping origins as seized goods, with some exceptions, such as a relatively high share (5%) of dark market counterfeits originating from the US. Lastly, counterfeits on dark markets tend to have a relatively low price and sales volume. However, based on preliminary estimations, the original products on the surface web seem to be worth a multiple of the prices of the counterfeit counterparts on darknet markets. Gathering insights about counterfeits from darknet markets can be valuable for businesses and authorities and be cost-effective compared to border seizures. Thus, monitoring darknet markets can help us understand the counterfeit landscape better.