Increases in Counterfeit Beauty and Personal Care Products
The rise of e-commerce has led to increasing sales of counterfeit or noncompliant beauty and personal care products, including many that are knockoffs of established brands. U.S. Customs and Border Protection (CBP) estimates that in FY 2023, 31% of intercepted counterfeit goods were beauty and personal care products. Third-party marketplaces host hundreds of thousands of items and sellers, leading to a constant game of “whack-a-mole” for brand owners trying to identify and eliminate fraudulent dupes of their products. Retailers cannot possibly police all fraudulent products, which are difficult to identify and may not trigger automated compliance algorithms. Instead, brand owners and regulators are forced to find creative ways to combat circulation of these items and maintain customer trust. For beauty and personal care products, recent changes in Food and Drug Administration (FDA) requirements and enforcement, as well as tariff policy, may be helpful in stopping the circulation of fraudulent products.
FDA Tools
Before 2022, FDA aimed its enforcement actions directly at third-party sellers of products that violated the Federal Food, Drug, and Cosmetic Act (FD&C Act). In 2022, however, FDA issued its first warning letter to a retailer for introducing a third-party product into commerce. Since 2022, FDA has taken the position that retailers that fulfill orders for third-party sellers introduce those products into interstate commerce and therefore bear regulatory responsibility for products that violate the FD&C Act. An FDA warning letter will generally force the retailer to remove the products identified in the warning letter along with all products in the suspect category that have similar features to the products identified in the warning letter.
Also in 2022, Congress passed the Modernization of Cosmetics Regulation Act (MoCRA), which expanded FDA’s ability to regulate cosmetics. One of the hallmark features of MoCRA required cosmetic products to be registered and listed with FDA. This requirement took effect in July 2024 and, as of January 2025, FDA’s database contained 589,762 unique, active cosmetic product listings — 16 times the 35,102 cosmetic product listings in FDA’s database pre-MoCRA. While the cosmetics database is not yet public, understanding which cosmetic products are legitimately marketed in the United States can aid FDA in taking enforcement action against fraudulent or unregistered products. That visibility can also assist FDA in working with CBP to stop the importation of fraudulent and illegal cosmetic items.
FDA’s warning letters to retailers regarding illegal cosmetics have, until now, focused on cosmetics that are unapproved drugs, i.e., products that (i) make claims that render them drugs or (ii) contain ingredients at levels only allowed in prescription drugs. However, MoCRA gives FDA more leverage to cite retailers, manufacturers or sellers for introducing unregistered products into commerce — for lack of adequate safety substantiation and labeling, or eventually for failure to meet Good Manufacturing Practices. This type of additional regulatory action would be especially helpful for brand owners that are combatting fraudulent imported knockoffs.
Other Regulatory Expansion
On the non-FDA front, President Trump issued an executive order (EO) on April 2, 2025, closing the “de minimis loophole” for tariffs on shipments valued at under $800 from certain countries. Prior to the EO, the majority of the packages shipped to the U.S. from third-party sellers (i.e., those valued at less than $800) were exempt from customs clearance. Now, shipment details must be reported to CBP and duties must be paid on all packages from China and Hong Kong, regardless of value. When combined with the MoCRA registration and listing data, customs declarations may now allow FDA and CBP to collaborate to prevent more noncompliant cosmetic products from entering the U.S.
Brand Considerations
In the meantime, what can beauty and personal care brands do to combat fraudulent products offered on online marketplaces?
- Leverage supply chains. Keep the supply chain for products under tight control and inform customers how to identify and where to buy legitimate products.
- Expand customer loyalty channels. Loyalty programs, unique ways to identify products and incentives to buy directly from original brands can ensure customers are accessing authentic products.
- Periodically test product offerings. Assume that regulators do not have the time or resources to conduct their own testing. Purchasing products from online marketplaces and sending them to a third-party lab can be extremely helpful, especially if testing reveals they may contain harmful or dangerous ingredients, which may spur regulators to act more quickly.
- Monitor brand IP. Most online marketplaces have brand portals that allow for disputes of sellers that engage in trademark, trade dress or copyright infringement. Submit information regarding these issues to retailers and follow up if they do not act. And simultaneously be proactive by confirming copyright and trademark registrations are maintained for all products.
- Report regulatory infringements. Cosmetics that are not registered with FDA, are not adequately labeled and that do not have safety substantiation information do not meet regulatory requirements. Brands can report data establishing the quantity and source of fraudulent products to FDA, CBP and states with strong cosmetics laws for further investigation. Providing as much documentation about what a legitimate product looks like versus the counterfeits will help regulators identify them more easily.
While counterfeit products are a nuisance for the beauty and personal care industry, taking advantage of improved regulation and risk mitigation strategies can reduce the harm counterfeiters can cause.
This memorandum is provided by Skadden, Arps, Slate, Meagher & Flom LLP and its affiliates for educational and informational purposes only and is not intended and should not be construed as legal advice. This memorandum is considered advertising under applicable state laws.