We are witnessing a crisis in the fashion world. Designers, manufacturers and retailers are watching their sales and margins plummet as unscrupulous Internet merchants steal their property. The Internet makes for a perfect storm, bringing together these virtually anonymous and largely overseas sellers of fake products with unsuspecting online consumers who believe they are buying genuine goods.

The ease with which counterfeiters can register a domain and inexpensively start online sales of knockoff goods is startling. For a few dollars, anyone can register a website, scour the Internet and steal the images of genuine products right from the websites of fashion designers and clothing retailers, and then use those stolen images to trick consumers into placing orders for what appear to be discounted genuine goods. Through this “bait and switch” scheme, the carefully built reputations of apparel makers are irretrievably harmed. Consumers come to think that they are just getting overcharged when they first visit the stores and websites of the apparel makers and their authorized retailers, and then quickly find what appear to be the same products for hundreds less on secondary sites and on popular marketplaces like Amazon and Taobao. And then when they do get the goods delivered to their door in UPS and DHL packages, their disappointment at seeing the inferior quality of the products only further deepens the damage to the reputations of the real apparel manufacturers. Because consumers think that they bought the genuine article, they blame the manufacturer for their misfortune. Fueled by the speed with which reviews can now get posted on social media and online platforms, this consumer backlash is devastating the fashion industry (and many other industries like consumer electronics and health care products which also feel the pain of illegal online activity).

Current Laws Are Outdated