Etsy’s Stock Takes a Hit After Research Points to Prevalence of Fake Goods — Retail Bum

Etsy’s stock slipped by 6% after Citron’s research revealed that the platform has become the largest hub for counterfeit goods.

Citron claims that a search for popular brands such as Nike and Disney returns a large volume of fake products, resulting from ad words sold to Etsy vendors buying those keywords.

“They are collecting 6.5% commission on it, they’re working with counterfeiters,” said Citron Research founder and Executive Editor Andrew Left. “They are giving them a platform, a payment system to sell counterfeit goods. That’s illegal.”

Left pointed out that many of Etsy’s trusted sellers are selling fake products such as Louis Vuitton handbags, fabric, and Rolex watches on the platform without any repercussions, which puts the platform at risk of legal challenges from the Federal Trade Commission, the Department of Justice, the U.S. Securities and Exchange Commission and the Customs and Border Protection.

While Etsy has yet to reveal if it will take any concrete steps toward preventing the sale of fake products, the company said it continues to remove counterfeit listings that violate its policies.

“Counterfeit items, fraud and other illicit practices are explicitly prohibited on Etsy, and our dedicated teams work diligently to remove listings that violate our policies,” an Etsy spokesperson told Yahoo News.

“The integrity of our marketplace is critical to our business…and as Etsy has grown, we have increased investments in a variety of sophisticated tools to protect our community against bad actors.”

Originally published at https://retailbum.com on February 17, 2023.