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Home Publications Blogs Beat the Press If the Consumer Is Not Deceived, It's Not "Counterfeit"

If the Consumer Is Not Deceived, It's Not "Counterfeit"

Monday, 09 August 2010 04:44

Why do reporters feel the need to indiscriminately label unauthorized copies as "counterfeits"? The distinction is very simple and important. A copy where the consumer understands that they are not getting the brand product is not counterfeit, regardless of whether or not there is an infringement of an individual or company's intellectual property protections. This distinction is important because the consumer is clearly benefiting in this case. The consumer is preferring to purchase the copy rather than the brand product.

By contrast, an actual counterfeit product is ripping off the consumer. The consumer is an ally in combatting counterfeits, whereas consumers benefit from the opportunity to buy unauthorized copies.

This simple distinction is lost at the the Washington Post. It describes markets in China as selling "counterfeit" products when it is very clear that consumers realize that they are not purchasing the brand product.

Comments (6)Add Comment
They have bought "counterfeit" news
written by Scott ffolliott, August 09, 2010 8:12
I haven’t found it possible to read the Post and consider its news genuine, although those that believe it (their news stories) to be genuine may find that they have bought "counterfeit" news
acting is all fake anyway
written by frankenduf, August 09, 2010 12:17
i just boolegged an unauthorized russian copy of inception- but the damn thing cut off at the end, so now i don't know if the top keeps spinning or falls!?- if only Dean knew all the psychological trauma that it is causing me, he wouldn't be so flippant in describing cheap copies as a boon to the poor folk
written by izzatzo, August 09, 2010 12:29
The flip side of this argument appears when what should be commodities are over branded products in order to charge higher prices through false differentiation.

Common examples appear in a walk down the soap or cereal aisle of a US supermarket, where hundreds of brands are developed from the same few basic components by the same supplier. Another example is mattresses, where it was discovered near impossible to compare prices because no two like versions ever appeared in different retail outlets, by design.

While not counterfeit, the false differentiation does constitute obfuscation and confusion in order to raise unit price above cost and capture consumer surplus, by presenting a transactions cost to most consumers way too high spend the time doing the research to break through through the branding fog.

Rather than compete on price by reducing unit cost for an equivalent commodity, concentrated retail industries "compete" by flooding the market with useless differentiated products, then complain when a competitor makes something that remotely looks like one of their hundreds of brands, which is almost a necessity given the attempt of brands to exhaust every possible variation.
They know the differnece
written by floccina, August 09, 2010 1:35
They know the difference. The word "counterfeit" attracts more attention, which is what they do far a living. Incentives matter. Maybe a better question is why do readers fall for it. Rational ignorance?
written by purple, August 09, 2010 2:04
One of the few things the US has to sell the world is monopoly IP, but trade agreements have only been able push this on countries who fall under the military umbrella. i.e South Korea, for one.

US businesses still have the illusion they can force their over priced monopolies on the entire world as they do the American population.
written by symond, August 10, 2010 2:45
The above thought is smart and doesn’t require any further addition.It’s perfect thought from my side.

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About Beat the Press

Dean Baker is co-director of the Center for Economic and Policy Research in Washington, D.C. He is the author of several books, his latest being The End of Loser Liberalism: Making Markets Progressive. Read more about Dean.