ITIF Investigation Finds Chinese E-Commerce Sites Facilitate Counterfeits; New Report Recommends Classifying Temu, AliExpress, and SHEIN as “Notorious Markets”

WASHINGTON—Counterfeit and infringing products remain readily available on major Chinese e-commerce platforms, an investigation by the Information Technology and Innovation Foundation (ITIF) has found. The investigation points to structural misalignments between the platforms’ incentives and their lax compliance with intellectual property (IP) and consumer protection laws. ITIF concludes that addressing the problem will require coordinated policy action on the part of the U.S. government.

The report’s release coincides with the Office of the United States Trade Representative (USTR) opening its request for public comments on the 2025 Notorious Markets List this week, making the findings and recommendations particularly timely.

ITIF purchased 51 products from suspicious listings on Temu, AliExpress, and SHEIN. Among those purchases, ITIF assessed that 24 from Temu, AliExpress, and SHEIN were likely counterfeits in categories such as cosmetics, toys, luxury goods, pharmaceuticals, and household items. ITIF concludes in its report on the investigation that USTR should classify Temu, AliExpress, and SHEIN as “notorious markets,” and U.S. Customs and Border Protection (CBP) should strengthen its inspection protocols, among other measures.

“The proliferation of counterfeits on Temu, AliExpress, and SHEIN is more than a series of isolated mistakes. It reflects a fundamental failure by these platforms to prioritize anti-counterfeiting efforts, leading to poor outcomes for brands and consumers alike,” said ITIF Policy Analyst Eli Clemens, who authored the report. “Counterfeit products are not only bad for the economy, but they also pose potential safety risks to consumers. Without coordinated U.S. enforcement, counterfeiters will continue to profit while American consumers and businesses pay the price.”

China is the primary source of the global trade in counterfeit goods. Together with Hong Kong, it accounted for more than 90 percent of the total value of counterfeit goods seized by CBP in 2024. This IP theft costs the U.S. economy up to $600 billion annually, according to the Federal Bureau of Investigation (FBI).

ITIF’s test purchases revealed that CBP successfully detained some items from AliExpress for inspection. But it ultimately failed to seize them and missed all likely counterfeits from Temu and SHEIN, highlighting gaps in enforcement.

The new report details how sellers exploit weak oversight, using tactics like keyword hijacking, false brand authorization claims, and deceptive product images. ITIF found that Temu hosts highly deceptive counterfeits, while AliExpress offered a mix of crude and sophisticated fakes. SHEIN showed some improvement following prior scrutiny but still faces IP infringement issues.

ITIF recommends U.S. policymakers take several actions to stem the tide of counterfeits:

• USTR should classify Temu, AliExpress, and SHEIN as notorious markets. Including them in the Notorious Markets List would signal that IP infringement in the U.S. market is unacceptable and push these platforms to improve monitoring and prevention of counterfeit sales.
• CBP should invest in AI to detect counterfeits. AI tools could systematically identify suspicious listings, detect pricing and product inconsistencies, and flag high-risk shipments, helping analysts focus enforcement and, over time, enabling more automated counterfeit detection at scale.
• The Department of Homeland Security should establish a Foreign Counterfeit Complaint Center (FC3). Modeled on the FBI’s Internet Crime Complaint Center (IC3), FC3 would allow consumers and rights holders to report suspected counterfeit goods. The system would generate data that government agencies could use to identify repeat offenders, compile enforcement evidence, and strengthen intellectual property protection.

“Addressing the counterfeit trade requires sustained U.S. action to recalibrate platform and vendor behavior through regulatory, trade, and technological measures,” Clemens concludes. “Holding foreign e-commerce platforms to the same standards as domestic ones is essential to protecting consumers, fostering innovation, and safeguarding the integrity of global markets.”

Read the report.

Contact: Nicole Hinojosa, [email protected]