There are many reasons for fake parts, The screwed up tort system affects aircraft parts a lot, but there are other issues, and the FAA is partially to blame.
Let me give you just one example, every two years I have to buy a new battery for my ELT (Emergency Locater Transmitter). Online price is nearly $300 with shipping. But What do I get for that? Well I get 6 Eveready alkaline C batteries spot welded together and wrapped in shrink wrap with a generic two prong plug on a pigtail and a FAA approved sticker. That is $12 of batteries, a 99 cent plug, 2 inches of wire, and a few cents of shrink wrap, and a stick on label. Maybe $15 of materials total, and that is being generous. The exact same batteries can be bought at any number of stores for about $2 each, retail. But if I was to go down and buy these exact same batteries at WalMart and install them I am violating the law. I am basically paying $285 for a sticker from the FAA. This insane mark up and thusly counterfeit parts is at least partially driven by the FAAs archaic rule making and inflexibility. If the FAA would streamline the PMA (Parts Manufacturer Approval) process to make it less costly to manufacture FAA approved parts, and if we could reform the tort system there would be a lot less demand for counterfeit parts.
