How to Identify, Disrupt, and Dismantle Unauthorized Product Distribution Annie Wood Client Service Manager MarkMonitor

Transcription

1 Joshua Hopping Investigative Research Specialist MarkMonitor How to Identify, Disrupt, and Dismantle Unauthorized Product Distribution Annie Wood Client Service Manager MarkMonitor 2016 MarkMonitor Inc. All rights reserved.

2 Agenda Introductions How Big is the Problem? Identifying Networks Data-driven Decisions Removing the Threat Q&A 2

3 How Big is the Problem?

4 A $250 Billion Dollar Problem The Mafia, Camorra, Triads, and the Yakuza have all been linked to counterfeit/unauthorized goods Counterfeit provides an easier way to launder money for other illicit activities It also allows criminals to diversify their crime according to Europol Just as the licit market for online sales of goods is increasing, so is the opportunity for the online sale of counterfeit goods by organized crime groups. United Nations Office on Drugs & Crime Source: United Nations Office on Drugs & Crime 4

5 The Anonymity of the Internet According to the IACC, the Internet has enabled counterfeiters to remain anonymous while operating hundreds of sites. Website operators can use fake information to register sites, making it more difficult to link them. Ease of entry into the market is less cost prohibitive. Networks can have several sites waiting in the wings if their main site goes down As the Internet is largely unregulated, networks can quickly grow and prosper What was once a cottage industry has now become a highly sophisticated network of organized crime that has the capacity to threaten the very fabric of national economies, endanger safety and frequently kill. It devalues corporate reputations, hinders investment, funds terrorism, and costs hundreds of thousands of people their livelihood every year. International Chamber of Commerce 5

6 Could it be networked activity? Lots of product below your wholesale price Reports from consumers/affiliates of product that is not consistent with your packaging or brand standards Product in regions you do not currently sell Multiple seller names or websites using the same imagery or language to describe products Sites registered to the same individual or company 6

7 Identifying Networks

8 Multiple Sellers, One Network Often, multiple sellers are tied to one network, and you need to go after the network, not each seller. For example, in the graphic to the right, 43% of all Amazon listings were attributed to one network. 22 Amazon Sellers; 18 different registered companies = one individual running the network. 8

9 9 Counterfeit Multi-Level Marketing (MLM) Networks The counterfeiting network recruits affiliates who then use the network s website templates to setup e-commerce sites. This provides a layer of anonymity for the true party behind the network. In this example to the right, the counterfeiting MLM network offered entrepreneurs 30% commission per sale using their distribution network. Our investigation uncovered the true infringer, and provided exact address and phone number to law enforcement.

10 Using International Shipping Data We can use shipping data for example, Chinese export data for destination countries from known brand infringers. This helps identify geographical areas of concern or provides intelligence for the possibility of new markets for legitimate goods. Online Marketplace To Streets : Tracking The Flow Of Suspicious Goods Company XYZ, Inc. promotes and sells suspect counterfeit Client ABC, Inc. products on Marketplace 123 Suspicious goods are then shipped to buyers around the world Buyers distributed suspicious goods to customers In the example to the right, the Chinese shipping data shows ONE Alibaba seller has exported over $104 million worth of goods via 604 shipments to 60 countries Shipments from known infringer on Alibaba to different countries 10

11 Data-Driven Decisions

12 Prioritize Your Brand s Pain Points What damage is being done? (Loss of sales revenue, consumer safety, brand image) What s the cost of enforcement? Do you want (or not want) publicity? (PR issues) How quickly do you want a resolution? What s the cost of enforcement? How much damage is being done? Can we make an example of the network? How quickly do we want a resolution? 12

13 What Comes Next? Once the infringing network has been identified, what s next? Enforcement that is systematic and targeted, placing higher priority on the largest platforms. Deeper investigation which can be used by follow-up with law enforcement or litigation purposes Investigation of international shipping patterns, with an effort to shut down demand and ensure partner compliance. Perform a deeper investigation Review international shipping data Conduct a targeted and systematic enforcement campaign 13

14 Removing the Threat

15 15 Enforcing the Law MarkMonitor works with law enforcement to shut down counterfeit networks. In the example to the right, these individuals operated a counterfeit software network that operated 35 proxyowned websites. MarkMonitor provided the brand owner with details about their lifestyle which included expensive real estate and high priced bottles of alcohol.

16 Identifying the Real Infringers Often, counterfeiters commit identity theft and register their domains using stolen identities. MarkMonitor researches registrants through various channels including social media, to ensure clients go after the real criminals, and not those whose identity was stolen. Street view picture of Registrant #2 house: Picture courtesy of Google Maps The example to the right shows 3 innocent people whose identities were stolen and used to register domains that sold counterfeit goods. 16

17 Summary

18 Key Points Listen to consumer and affiliate reports for hints at unauthorized product Investigate, investigate! Weigh the costs and benefits of the different types of enforcement Tell your enforcement story to get buy in across internal and/or external stakeholders Consumers from all over the world are using the Internet to purchase every day items, and criminals are taking advantage of this trend. INTERPOL s Director of Organized and Emerging Crime, Roraima Andriani. Source: INTERPOL 18

19 Q&A

20 Thank You! For information on MarkMonitor solutions, services and complimentary educational events: Contact via Visit our website: Contact via phone: US: 1 (800) Europe: +44 (0)