Meta's platforms are hotbeds for counterfeit goods

Facebook parent Meta is a hotbed for counterfeit goods, with fake items from Gucci to Chanel widely available on its platforms and social media apps.

Research from Ghost Data says Meta’s apps continue to provide lucrative channels for sellers of fake consumer goods all over the world.

“Particularly Meta and its subsidiaries have developed a strategy increasingly aimed at becoming an e-commerce leader, thus attracting a more diversified crowd of ruthless counterfeiters. In turn this has further exposed Facebook’s inability to keep under control such activities on its platforms. This controversial behavior led to an increase of counterfeit sellers and eventually to a general user distrust still evident today.”

Ghost Data first exposed the issues in 2014, and contributed to an NBC News report about fake sales on Instagram. In 2020 the company uncovered over 10,000 counterfeit masks on Instagram.

A booming trade

The global trade in counterfeit and pirated products was worth an estimated 464 billion dollars in 2019, amounting to approximately 2.5 percent of world trade, according to the latest data from the Organisation for Economic Co-Operation and Development (“OECD”).

Counterfeit acceleration due to Covid-19

Growth in counterfeit products is likely to have accelerated amid the COVID-19 pandemic, as government mandated lockdowns and widespread consumer caution has significantly impacted consumption behaviors and prompted a stunning rise in e- commerce activity. Counterfeiters have benefited from the spike in online shopping, which has been prompted in part by the increased comfort of consumers of various demographics to not adopt e-commerce as a mode of shopping but to shop for a wider array of goods online than ever before. This has allowed counterfeit-sellers to reach and potentially dupe more sizable pools of consumers than in the past.

At the same time, counterfeit-sellers have piggybacked on the production and distribution disruptions that have led to widespread shortages of authentic goods, thereby, enabling them to fill glaring voids for various types of products – albeit with inauthentic ones.

Online commerce is a key priority for Meta, said Reuters, which has pushed new shopping features that could help grow its revenue as it faces pressures like ads tracking changes and after a slowdown in new users.But users exploiting its platforms to sell fake goods present a persistent problem for the company, which also faces scrutiny from lawmakers and regulators about its content moderation.

"The sale of counterfeits and fraud is a problem that has always persisted with new technology," said a Meta company spokesperson in a statement. "We are getting better every day at stopping these sales and cracking down on fraudsters," the person added.

Counterfeit sellers consistently adopt new methods to obscure their identities and activities, said the report, making it difficult for brands to easily put a halt to their operations.

Ghost Data uncovered 26,770 counterfeiters' accounts active on Facebook at the end of October 2021 over a period of 20 days. They further estimate that on Facebook and Instagram combined there are about 6,000-7,000 wholesalers from China, with an annual business turnover ranging between 1.8 billion dollars and 2.1 billion dollars.

Counterfeiter statistics

• Their potential audience can easily reach 20 million users only through people that are “friends” with such counterfeiter accounts. The vast majority of Instagram and Facebook counterfeiters are based in China – 65 percent (up from 43 percent in 2019) – followed by Russia (14 percent) and Turkey (7.5 percent).

• The brands most pictured are items by Louis Vuitton (almost 6 out of 10), followed by Chanel (8.5 percent), Fendi (6.7 percent), Gucci and Prada (both over 3 percent).

• The LVMH group items/brands cover about 67.8 percent of the overall visual content posted by counterfeiters. Far distant are Kering and Chanel, both with over 8 percent, and the other groups combined with about 15 percent.

Yupoo, a new visual platform combining some features of both Flickr and Pinterest, is now the catalog system most used by counterfeiters. It is a China-based service enabling users to easily create detailed albums (with pictures of zips, seams, labels, etc.) that can be shared via a simple link over the Internet. Ghost Data identified over 6,500 unique links with over 2 million images of images and videos of counterfeit items.

The report concludes Meta’s security reports and legal initiatives, the effects of their supposed crackdown on these illicit activities are disappointing and insufficient. This apparently unstoppable trend is causing a whole array of serious problems, including child labour, exploitation of women, toxic products, digital frauds, and funding of criminal and terrorist organizations.

Article source: Ghost Data “The Meta Counterfeiting Empire, A Global Threat Thriving on Today’s Social Media”