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"The Book on Business"
June 2006
by the Business Librarians at the Carnegie Library of Pittsburgh

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HF1040.7.P55 2005
Knockoff: the Deadly Trade in Counterfeit Goods: The True Story of the World’s Fastest Growing Crime Wave

by Tim Phillips. Kogan Page, 2005.

Maybe your budget doesn’t allow for purchases of Hermes silk scarves, Louis Vuitton handbags or Rolex watches. But that doesn’t mean that you wouldn’t welcome the chance to own these luxury goods if you could afford them. What if you were able to buy items that looked just like the originals and sold for one-fifth or one-eighth of the original price? Would you do it – or be tempted to do it? After all, these purchases will give you pleasure and you’re not hurting anybody. Or are you? Tim Phillips, a British journalist, has traveled around the world to find answers to these questions. His book goes on behind the scenes in this multi-billion global industry – and it’s not a pretty picture.

There is no shortage of places to buy fashion knockoffs. Street vendors are well-stocked with fake Coach handbags and Burberry plaid scarves. Remember the Tupperware parties of years past? Now suburban moms host “purse parties”, where their friends gather to buy the latest look-alike fashion accessories. For those who travel to New York City, there are bus tours through Chinatown that point out the best places to buy knockoffs.

eBay is a bonanza for people looking to make money selling counterfeit designer and brand-name items on the Internet. Recently, Tiffany & Co. secretly purchased several hundred items on eBay purporting to be genuine Tiffany items, and discovered that three out of every four of them were fakes. They are filing a lawsuit, but these cases are time-consuming and expensive and many attorneys hesitate to pursue them.

Counterfeit merchandise is not limited to the fashion and accessories industry. CD, DVD and video game piracy is rampant. Copying these products is not done just by computer-savvy hackers in their bedrooms; moonlighting IT professionals are often involved in getting these products to market. New movies can be obtained by people in the industry who have access to pre-release copies. Mr. Phillips offers many disturbing examples of how piracy is eating into the profits of software companies, music publishers, film studios and computer game developers throughout the world.

Buying bootlegged CDs, fake iPods and other brand name items are not life-threatening activities, but Mr. Phillips presents alarming evidence about a darker side of the counterfeiting business. Large markets exist for substandard airplane and automobile parts, including tires, brakes and fan belts, putting travelers’ lives at risk. Consumers, reeling from the high cost of pharmaceuticals, are desperately looking for less expensive alternatives. Unscrupulous suppliers sell look-alike medications that may contain only a small amount of the actual drug. These can be ineffective, dangerous, or even lethal. Buyer beware!

The amount of money generated by counterfeiting activities is mind-boggling and lends a new meaning to the concept of global trading. Trade in illegal music sales alone was estimated to be $4.5 billion in 2003. Many of the products are manufactured in China and are so well made that even trained customs officials have difficulty distinguishing the real from the counterfeit. Russia is also considered a major player, along with many other countries that may surprise you. The sophisticated technology that enables manufacturing and the world-wide distribution of goods are worthy of being included in a James Bond film.

There is a growing concern that the counterfeit trade has a strong connection to organized crime. Mr. Phillips explains how the billions of dollars in illegal profits may be funding a range of nefarious activities, including terrorism.

At this point, you may be wondering why law enforcement officers aren’t more aggressive about taking down major counterfeiting operations and bringing the perpetrators to justice. This issue is more complicated than it seems. Although these activities involve bribery, money-laundering and corruption, many local governments don’t view counterfeiting as a “real” crime. This is just the way business is done in many parts of the world. Many local economies are kept solvent by the manufacturers and distributors, whose activities keep many people employed. Attempts to dismantle this business model could have serious social and economic consequences.

Written in the bracing style of much of British journalism, this book is an easy read but a memorable one: you’ll find yourself thinking about its revelations long after you finish it. You may even change your mind about buying that too-good-to-be-true bargain, after finding out about its shadowy journey into the marketplace.


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Contact the business librarians, who also answer questions about business, money, and work, at (412) 281-7141 or at www.carnegielibrary.org/locations/downtown/contact.cfm.


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