2018 Special 301 Out-of-Cycle Review of Notorious Markets: Chanel’s Choices

Every year, the Office of the United States Trade Representative (USTR) collects a list of the most notorious online and physical counterfeit spots that are outside US borders. (Special 301 Out-of-Cycle Review of Notorious Markets). For example, the 2017 report mentions, inter alia, the following marketplaces: DHGhate.com (China), Indiamart.com (India), Taobao.com (China), Vkontakte.com (Russia), and the shopping mall called “Pacific Mall” in Markham, Ontario, Canada (iptwins.com, 1st Oct. 2018). As part of the 2018  Comment Request from the USTRChanel shared its experience in a letter to the USTR on October 2, 2018.
Chanel designates fifteen websites, mainly online marketplaces, and some social networks. However, the French company specifies that it has retained only platforms “where the visibility of CHANEL counterfeits is dramatically high“. Chanel justifies its choices by the following selection criteria: the reputation of the platform; its traffic and its willingness in the implementation of preventive measures. To this end, and more precisely, Chanel refers to statistics and other information including:
  • the ranking of the site in one or more countries (or in other words, its popularity locally);
  • the average time a user spends on each page;
  • the traffic generated by the search engines;
  • the number of links to the platform concerned;
  • the number of URLs denoting pages infringing its intellectual property rights;
  • the selling price of the goods;
  • the nature of the goods and their potential danger (especially for perfumes and cosmetics);
  • the number or percentage of goods falsely represented under the Chanel brand at a “T” time.

The investment and/or the sudden success of certain platforms are also taken into consideration (for examples, Pinduoduo, Weidian.com, 4Carousell, Bukalapak, Tokopedia, Snapdeal, Coupang). Indeed, a fair share of the injected investments should be used to implement policies and procedures intended for the respect of intellectual property rights.

Chanel has come to the conclusion that the following platforms should be included in the Special 301 Out-of-Cycle Review of Notorious Markets list:
– 4Carousell (Singapore, Head Office):
hk.carousell (Hong Kong)
– tw.carousell (Taiwan)
– id.carousell (Indonesia)
– my.carousell (Malaysia)
– ph.carousell (Philippines)
– sg.carousell (Singapore)
– us.carousell (United States)
– Bazar.bg (Bulgaria)
– Bigl.ua and Prom.ua (Ukraine): Chanel emphasizes the dramatic level of counterfeiting and the total lack of cooperation of these two platforms. The French company adds that the situation of Prom.ua is all the more unjustifiable and unacceptable given that this company belongs to Naspers.
– Bukalapak.com and Tokopedia.com (Indonesia)
– Bunjang.co.kr (South Korea)
– Coupang.com (South Korea)
– Kakao Story (South Korea)
– MercadoLibre (Argentina)
– Naver (South Korea), including Naver Store Farm, Naver Cafe, Naver Blog, and Naver Band
– Pinduoduo (China)
– Sahibinden.com (Turkey)
– Snapdeal.com (India), where 100% of the detected goods are not related to the Chanel company
– Weidian.com (China), whose first 100 results are considered, unequivocally, as counterfeits.
As for physical locations, Chanel’s list includes 26 places where counterfeiting is visible. These markets or shopping centers are located in North America, South America, Asia, Europe, and the Middle East. In this respect, Chanel’s experience feedback is interesting for the reason that, to the extent possible, the French company refers to the volumes of counterfeit goods, the previous raids, as well as the level of cooperation of local authorities. To this regard, Chanel highlights the protectionist attitude of some local Chinese authorities.
It should be remembered that the Special 301 Out-of-Cycle Review of Notorious Markets does not concern US companies. Accordingly, there will be no mention of eBay (although the US authorities regularly perform actions on counterfeit cases in relation with sales on eBay: iptwins.com, June 25, 2018; iptwins.com, August 27, 2018), SunFrog.com (the platform was recently condemned to nearly $ 20 million for counterfeiting: iptwins.com, June 27, 2018), or even Amazon.com.
However, like Frères Maus (iptwins.com, Nov. 15, 2018), and, more subtly, the American Apparel & Footwear Association (AAFA) (iptwins.com, Oct. 19, 2018), Chanel also refers to an American platform (us.carousell) and two shopping centers: Westgate Discount Mall (Atlanta, Georgia) and Hong Kong City Mall (Houston, Texas).

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