Italian fashion is in high demand around the world, so it's no surprise that counterfeiters are making the most of it.
But rip-off versions of clothes, shoes and accessories are costing the fashion business €4.5 billion in lost sales each year. Counterfeiters have also cost the country 50,000 jobs.
With many of the world's top fashion houses located in Europe, the study by the EU's Office for Harmonization in the Internal Market "reveals the threat that counterfeiting poses to the industry's innovative output and the direct and indirect costs to the EU economy."
Spain suffers the second biggest loss, at €4.1 billion a year, followed by the UK and France.
Overall, counterfeits are worth nearly 10 percent of the clothes, shoes and accessories sold in the EU, taking away over €26 billion in business.
And if knock-on effects on other industries and lost government revenue are included, the economic impact rises to €43.3 billion per year.
Counterfeits also have a major impact on jobs in the 28-country EU, where several countries are grappling with high unemployment.
Estimated job losses ranged from 363,000 to nearly 520,000 if indirect effects are included.
The unemployment rate in the EU was 9.6 percent in May.