Governments, Industry Must Stop Electronics Counterfeiting

by Craig Hodgson, on December 27, 2016

Screen Shot 2016-12-20 at 4.20.31 PM.pngCounterfeit electronics can pose a threat to the end customer - and not just to their pocketbooks.

The Organization for Economic Co-operation and Development estimates that global imports of counterfeit goods are worth almost half a trillion dollars per year - 2.5 percent of all global trade. Faking products is a big business, and while pharmaceuticals are the number one target for counterfeiters, electronics come in close second, according to a report by online brand protection firm NetNames. All told, the market for counterfeit electronic devices is worth $169 billion, and encompasses everything from knock-off smartphone chargers to fake military equipment.

"These products may not have been manufactured according to any sort of safety standard."

Counterfeit electronics can pose a threat to end customers - and not just to their pocketbooks. These products may not have been manufactured according to any sort of safety standard, meaning they risk malfunctioning, causing fires and electrocuting users during operation. Finding them and removing them from the supply chain should be a high priority for producers and regulatory agencies.

For instance, earlier this year the Department of Defense finalized new rules meant to help weed counterfeit products out of its supplies. Previously, large contractors who accidentally allowed a fake component to slip through would be responsible for reimbursing the government millions of dollars. Under the new rule, those that adopt a DOD-approved system for identifying counterfeits will be able to recover those restitution costs. The idea is to give contractors more of a positive incentive to clean up their supply chains.

Electronics manufacturers and supply chain managers cannot prevent counterfeiting without a reliable labeling system to identify genuine products. Thanks to Enterprise Labeling Solutions, it is easier and more cost-effective for businesses to produce the barcode labels they need based on a single source of truth.