"Already brazen"

Companies fight in vain against counterfeit products on Temu

The German Brands Association sees platforms such as Temu as "a gateway for counterfeit products that cause immense economic damage."

(Bild: AFP)

Toilet brushes, towel rails, universal hooks - time and again, Wenko Managing Director Niklas Köllner discovers items on Temu that are deceptively similar to products from his own range. He can hardly take effective action against the product pirates. Like Köllner, other entrepreneurs also complain that counterfeits of their branded products are offered on the Chinese platform without much consequence.

One and a half years after the launch of Temu in Germany and Austria, the online marketplace is becoming a problem for German and Austrian companies. "Platforms like Temu offer products that often seem too good to be true," says Patrick Kammerer, Managing Director of the German Brand Association. "These platforms are also a gateway for counterfeit products that cause immense economic damage. We hear this time and again from our members." The activities of such platforms are a major challenge for SMEs in particular.

Temu had 92 million users in September
The EU Commission suspects Temu of not playing by European rules. At the end of October, the Brussels authority initiated proceedings against the Chinese company because it suspects, among other things, that the marketplace is not taking sufficient action against illegal counterfeiting. According to the EU Commission, Temu reported 92 million monthly users in the EU in September.

One of the SMEs affected is the German household goods manufacturer Wenko. All the registered intellectual property rights in the area of product design hardly protect the company on Temu. His company has registered around 400 cases so far, says Wenko boss Köllner - a universal radiator hook alone more than 100 times.

German pliers manufacturer Knipex has also reported massive problems. Since July 2023, the Wuppertal-based company has identified more than 220 infringements on Temu for six products such as pipe cutters and gripping pliers. "IP rights are constantly being infringed on Temu. That's pretty brazen," says Managing Director Ralf Putsch. According to him, Knipex's advertising images were often even used, only without the company logo.

"Deceived and cheated"
Kammerer from the German brand association explains the legal situation: "If a brand owner discovers a counterfeit product of their own brand at an online retailer, they can report this to the platform operator." According to the EU Digital Services Act (DSA), Temu and others are then obliged to remove the product from the site.

From Kammerer's point of view, however, the problem is that content already known to be illegal can be uploaded again. "This has not yet been sanctioned by the DSA. That's a mistake." As a result, counterfeit products have repeatedly ended up on Temu. As a rule, there is no marketplace liability. "Consumers are being deceived, brand owners are being cheated," says Kammerer.

Wenko, Knipex and many others can tell you a thing or two about it. Knipex repeatedly asked Temu to remove the items from its marketplace. The portal complied, but shortly afterwards the items could be found again. Either from the same retailer or from another one. Putsch believes that anyone who operates something that constantly violates the law must share liability. Knipex had similar problems with Amazon years ago, but things have improved.

"Legal enforcement is virtually impossible"
And the dealers of fakes? It gets even more complicated. In principle, brand owners can take legal action if suppliers offer counterfeit products, says Kammerer from the brand association. "In the case of foreign suppliers, international legal assistance is required. This is highly complex and lengthy, especially in Asia. Enforcing the law is therefore virtually impossible."

Temu sees itself unfairly criticized
Temu rejects the accusations. "We immediately follow up on reports of possible infringements and take the necessary measures, for example by deleting offers and images," says a company spokesperson. Rights holders can submit their complaints via a portal, and 99 percent of requests are resolved quickly. Sellers who repeatedly or seriously violate these rules are permanently excluded from the platform.

Temu explains that it has continuously improved its efforts to protect intellectual property. This also serves "the long-term success and growth of our platform".

E-commerce expert Alexander Graf takes a different view of the situation. According to him, the operators of online marketplaces have no genuine interest in changing anything. "After all, they earn money from the sale of products. If they take a product off the platform, people will buy it somewhere else." Graf fears negative consequences for the European manufacturing industry if companies and customers are not better protected by law. Then the decline will continue.

Customs are overwhelmed by the flood of goods from China
So what can be done about the counterfeits? The German and Austrian trade associations complain that traders offering counterfeit goods are often untraceable for local authorities. Therefore, a responsible economic operator based in the EU must be appointed who is liable for misconduct by companies from outside the EU.

The German Brands Association is also calling for a political commitment to the protection of intellectual property. "Anyone who violates these intellectual property rights must be punished accordingly. Other countries, such as China, use such rights specifically as an instrument to promote their own companies and products," says Kammerer.

And he points to another problem: "The flood of small consignments is overwhelming the customs authorities." Only around 0.01 percent of consignments are checked. "There is almost no control. This means that we need to strengthen customs staffing and improve technical equipment."