In a report published on Feb. 16, 2023, online stock commentary website Citron Research claims to have exposed the “dirty secrets” of Etsy, the New York-based online marketplace for buying and selling handmade and other products, founded in 2005, and its failure to shut down the sale of counterfeit goods, including well-known sports brands.
The report alleges that Etsy has become “the largest organized clearing house for counterfeit goods in the world.” It further claims management has not only allowed the behavior but encouraged it and promoted it “by selling placement and status to the millions of sites that regularly violate copyright laws.”
Although known as a platform for individuals to sell homemade goods, according to Citron Research, Etsy now has a product mix “skewed heavily to clothing, jewelry, and bags.” This includes fake Nike products.
According to Citron, a search of “Nike” on Etsy will return close to 200 thousand stores, with the top 6 out of 8 clearly being counterfeits but promoted as star sellers by Etsy.
Citron alleges that although such behavior violates Etsy’s own terms of service and the company has brought in attorneys to clean up the site, they are not doing enough to control the problem, with Etsy’s behavior “bordering on criminal as it knowingly or negligently sells trademarked keywords to counterfeiters.”
For more on the liability of the operators of online platforms in the area of intellectual property infringements, see our analysis of a recent ruling from the highest judicial authority of the EU, the European Court of Justice (ECJ), who made what legal experts are calling a “landmark decision” in Dec. 2022.
