- general higher costs to manufacture in Europe (including labor rights)
- certifications about hazardous substances, radio compliance etc.
- R&D (clones just download the CAD file and load it into the machines with zero costs for product design, development, testing etc.)
- software development of the cores/board support packages (clones benefit from the upstream development with zero cost on their side)
- software development of the tooling (IDE, CLI...) which is a recurring cost as things need to be maintained (clones benefit from the work done by Arduino with zero cost on their side)
- marketing/adv/evangelism/documentation (clones have almost zero cost as they benefit from the long tail of the promotion made by Arduino)
That said, this is legit and Arduino even encourages it by deliberately making the products open source hardware thus releasing the files that any cloner can use and become a competitor at a fraction of the original costs. Buyers can freely choose if they want to support those costs or not, it's up to their ethics, budget and personal choice. But the prices are different because there are different thing inside.
A counterfeit is a product that tries to deceive customers making them believe that it's manufactured by someone else (regardless of the open source nature of its design). Open source hardware design only makes for a part of a commercial product and does not cover manufacturing, supply chain, quality of components, warranty, customer support etc. etc. for which it's important to distinguish who is the actual entity responsible for that product.