It’s long been known that a huge volume of fake products are being made, sold and bought  online. More recently, though, counterfeit beauty products have come into the spotlight as a growing problem, not only as a quantifiable source of brand devaluation and reputational risk, but as a real and serious health threat. Last June, ABC’s David Muir investigated fake Mac brand eye shadow being sold in a dollar store in Manhattan, and found that it contained five times the acceptable amount of lead and 20 times the amount of copper the human organism can sustain, as well as beryllium, a known carcinogen. Maybe not the 200 times found in a later bust, but certainly enough to raise the hair on a cosmetics brand owner’s neck. Research recently fielded for us found that more than one in eight Britons would knowingly buy a counterfeit gift for their partner. Even worse, 10 percent of these would risk of seriously injuring their significant other by buying them fake makeup or perfume. We think and hope that this statistic speaks more to the desire to clinch a bargain than to injure or maim a loved one, but still, it speaks volumes. Basically, it says, “I’ll take the risk, if the price is right.”Consumers expect ever cheaper products, and fakes play right into this expectation. Aside from the legal implications presented by the mass of counterfeit goods available online, use of counterfeit personal products, a growing problem, could result in serious health consequences. Taking a note from one official bust of fake makeup containing 200 times the safe limit of chemicals earlier this year, it’s sobering to reflect that the annual economic cost of deaths resulting from counterfeiting,according to a recent study, is $18.1 billion, with another $125 million for the additional cost of health services to treat injuries caused by dangerous fake products. There’s little doubt in anyone’s mind that the internet has injected a steroid into the world of counterfeiting—a problem that affects virtually every area of retail and consumer products. About 40 percent of the world’s population uses the internet—a figure expected to pass 3 billion people in 2015. The Indexed Web contained at least 4.67 billion pages as of this writing (Thursday, April 9, 2015).  The worldwide web is here to stay, and is only going to grow with the use of new gadgets such as the Apple Watch, that increase consumers’ savvy, connectivity and use of apps. New types of online content and platforms appear daily, at an ever-increasing rate. Brands are an enormous part of this growth—and along with it, there’s fertile ground for counterfeiters and online pirates to flourish and propagate, as well. In the U.S., which consumes 16 percent of all the world’s goods, more than $46 billion in internationally traded counterfeit and pirated goods are bought or downloaded each year; domestically produced fakes add another $14 billion to this astounding annual figure. Going back to our earlier observation that some consumers are relatively nonchalant about buying knockoffs, legitimate brand owners are in a real quandary. Pressured to develop their online and digital presence—something their customers increasingly expect —their losses mount between lost sales and the threat to their brand’s integrity, online or otherwise. Not to mention the actual health threat posed by some counterfeit or adulterated goods. The good news is that even the most convincing fakes can be spotted and removed from the online market. But to do that, it’s also critical for brand owners to have an online protection strategy in place, to identify and locate cybercriminals’ online presence, and cut them down at the source. Many goods are made in remote lands, which means that brand owners have less control over manufacturing processes. How easy it would be for these plants to run an extra thousand of any luxury handbag, for example. This puts extra branded goods that are “real,” but fake, into the supply chain—and as a result, gives shoppers unprecedented access to well made, low-cost counterfeit goods. Brand owners need to understand the online environment’s underbelly, and get a measure of its insidiousness. Examining the threat squarely is step one. Take stock of how pervasive the problem is – and get proof for yourself of its effect on your brand. Just so you don’t think you’re alone—60 percent of businesses we surveyed have no system in place to protect their intellectual property online.  Yet 93 percent of the executives we interviewed in the same survey think that protecting their online assets will become more important or remain just as important over the next year. Next, conduct an audit of fraudulent activity on social media platforms and mobile app stores. The audit should focus on the key issues that are most likely to affect your individual brands and trademarks—for example, cosmetic products are physically small enough, and thus easy to ship, that you might focus on direct online sales in addition to activity that promotes the distribution of counterfeit goods. Now it is time to prioritize. A scoring system specific to the most important brands and infringements will allow for strategic decisions based on activity seen in real time; and it will enable your organization to focus on the enforcement that matters most. Social Media and Mobile Present More Leaks in the System As of January 2014, mobile devices accounted for 55 percent of internet usage in the United States, and apps made up 47 percent of internet traffic, according to Comscore. Some brand owners have commented that social media platforms are the world’s biggest free advertising networks. Counterfeiters targeting average consumers rely on advertising their products online, too, and especially through social media. Infringements specific to retail and brands have been seen on many mobile app sites—for example, the inclusion of brand imagery or trademarks to legitimize unauthorized apps and sales; apps that impersonate brands in order to offer counterfeit goods to consumers or businesses; and even apps that offer software to hack into third-party security systems. Our research shows that mobile app users are less likely to question app legitimacy. This presents a further challenge even to well-meaning consumers, as well as to the brand owner. Brand Owners Are the First Step in Taking Down Fake Content Taking down counterfeiters, while requiring somewhat painstaking detective work, is possible—in addition to seizure of actual counterfeit goods, we’ve removed many thousands of phony websites, social media phishing posts, and apps. At the outset, it’s the brand owner’s responsibility to detect thefts of their intellectual property and prioritize actions against the cyber criminals responsible for them. These include using the platform’s own (Facebook, etc.) reporting mechanism for intellectual property infringements to request suspension of the account and/or content; using search engine mechanisms (Google et al.) to remove links, thus disrupting traffic to fake sites; and directly asking the infringer to take down the fraudulent content. Taking a cue from the power that consumers are gaining, our experience shows that lobbying by brand owners and their representatives can bring about positive change on the policies of individual sites. But if suggestion fails, there’s always the “incentive” to offer that, as a felony, serious acts of cyber crime are punishable by up to 20 years in prison and fines of hundreds of thousands of dollars. Armed with these tactics, the brand owner can use the necessary combination for the most effective outcome. Measuring Peace of Mind There are ways that brand holders can chart how an online brand protection strategy helps them succeed. As online pricing competition shrinks margins, having a robust online protection plan will deliver a rise in sales through legitimate channels. With fewer opportunities for consumers to buy counterfeit goods, brands should see an increase in the quality and quantity of their online traffic to legitimate sites. Over time, a reduced number of brand infringements will set up a longer-term cycle of keeping fraudsters at bay, along with an increase in successful enforcement actions. The potential return on investment that can be realized from an online brand protection strategy can actually be monetized. The key is not to ignore what’s going on—not to hold out hope that brand infringers and other cybercriminals will forget you, or go away. These felons are undercutting your business and damaging your brand’s reputation, not to mention posing a threat to consumers who are buying fake versions of your product. Take a measure of what’s going on, get a plan in place to remove them, and take action. Now’s the time. About the Author Haydn Simpson is product director of brand protection at NetNames, a firm specializing in global online security, brand protection and anti-piracy services. He can be reached at [email protected].