I'd like to quote from the famous economist here, John Kenneth Galbraith once said :
"Under capitalism, man exploits man. Under communism, it's just the opposite"
Politics completely aside, if we were to replace the political systems and consider the two business models in the same way (e.g. Genuine manufacturer V Clone), exactly the same rule of thumb applies. While this is pure generalisation, one will lean towards legal action, brand strength and being part of a cartel or a monopoly (via mergers and acquisitions or other means) to achieve market dominance, the other will undercut quality, ride on the shirt tails of previous R&D innovation and totally disregard any laws to make a profit. The free market is not as free as it appears as there will always be competition.
The key to this, as
@stols001 correctly pointed out, is lying, or on a more philosophical basis, business ethics. There will always come a point when a business is under threat from their competitors. How do they respond under these circumstances? I agree that the clone companies etc are the lowest of the low, but they are an easy target in the ethics game. What about the likes of Volkswagen who have been caught out deliberately programming engine management systems to get around emissions standards? Or indeed the likes of Apple who tried to patent round corners in a legal attempt to secure intellectual property rights? Or food manufacturers packaging their products in such a way to mislead the consumer? The corporate buyouts and asset stripping to gain control? The list goes on. Neither side is pure as the driven snow.
What I find fascinating is in the UK major steps are being taken to run the counterfeiters out of town, with police, immigration and revenue raids on shops. They really are throwing the book at these guys, who quite often, are linked to organised crime. Yet the problem will continue, as there is too much demand and money to be made, mainly for faux designer clothes etc. that will hardly kill anyone. It is really interesting to note that we never used to have a big problem with fake cigarettes or alcohol in this country until the government raised the taxes on these products to ridiculous levels. Yet there have now been cases of people going blind, and some of the fake cigarettes have really nasty ingredients in them, but these guys don't get caught very often.
I can see the same problems happening with vaping in general if a harsh stance is taken and prohibition (which has been linked to the growth of the Mafia in the 1920's due to banning alcohol) becomes prevalent. The bad guys will just be driven underground, and the good guys just out of business.
So it is in everyone's interest that the market doesn't attract too much attention, especially considering the symbiotic relationship between the counterfeiters and genuine manufacturers, as the former are quite often responsible for market growth of the latter that wouldn't have occurred so rapidly. The humble PC is an example of this, the consumer market didn't take off until the major manufacturers were forced to compete on price.
Let's hope the market stabilises, the market leaders don't get greedy and strong action is taken against those who endanger others with poor quality product. As consumers, we are in a powerful position, and now more than ever we must heed the old phrase - Caveat Emptor, Buyer beware.