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Facebook, Instagram, WhatsApp Called Out Again for Counterfeits

The American Apparel & Footwear Association (AAFA) is again calling on the Office of the United States Trade Representative (USTR) to designate social media platforms and marketplaces including Facebook and Instagram as “Notorious Markets.”

In submitting comments to USTR’s 2021 Special 301 Out-of-Cycle Review of Notorious Markets, AAFA highlighted the industry’s concerns with marketplaces that “engage in or facilitate substantial copyright piracy or trademark counterfeiting.”

AAFA cited significant increases in the availability of counterfeit products via social media in its submission, in particular concerns with Facebook’s platforms–including not only Facebook but also Instagram and WhatsApp–that the organization said are being used by counterfeiters to advertise and sell fake goods.

This is the second time AAFA has highlighted Facebook in its submission for USTR’s Notorious Markets report and follows increased focus on the role of social media in facilitating the sale of counterfeits online. Earlier this year, AAFA released a report, “Dupe Influencers: The Concerning Trend of Promoting Counterfeit Apparel, Footwear, and Accessories on Social Media,” with analysis of what it said was the alarming behavior that has generated millions of views, likes and shares of content directly related to the advertisement and sale of counterfeit goods online.

Amazon, for example, recently settled a lawsuit against influencers who peddled luxury counterfeits on platforms like Instagram and TikTok. “This settlement sends a strong message to would-be bad actors that Amazon will find you and hold you fully accountable,” Kebharu Smith, director of Amazon’s Counterfeit Crimes Unit, said in a statement.

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Last year, AAFA recommended Facebook be included in the 2020 Notorious Markets List for three reasons–the volume of counterfeits available across Facebook and Instagram, lack of effective intellectual property tools and increase in fraudulent ads. This year, Lamar said AAFA “would like to flag two additional issues as part of our submission this year–lack of seller vetting and repeat offenders, and lack of transparency.”

AAFA also nominated three other platforms–Indonesia’s Tokopedia and Bukalapak, and Singapore’s Shoppee–in its submission this year.

“Counterfeits, which are far too easy to find online these days, are a scourge on our society,” Steve Lamar, president and CEO of the AAFA, said. “Counterfeiters steal American intellectual property, destroy American jobs, traffic in unsafe products and ignore responsible factory conditions. Most people don’t want to buy counterfeits, but they often end up with them anyway because many social media sites and third-party platforms do not do a good enough job vetting sellers and providing transparency to users and consumers.”

He said this is why AAFA is supporting the SHOP SAFE Act and the INFORM Consumers Act–two measures that will make it difficult for counterfeiters to ship their illicit merchandise to unsuspecting consumers–currently moving in Congress.

Lamar said recommendations to be included in the Notorious Markets List are drawn from the extensive feedback of a broad representation of AAFA members who have regular and continuous experience enforcing their brands’ intellectual property. In the lead up to this year’s Notorious Markets cycle, AAFA evaluated how to standardize its approach to collecting member input for this process, specifically as it relates to feedback on e-commerce platforms.

“This is also why the Notorious Markets process is such an important tool in the fight against illicit goods, as it holds those who do not meet basic standards accountable to the public,” Lamar said. “As we have seen over the years, the Notorious Markets List carries significant weight, even though the report carries no ‘official’ penalties for marketplaces. The List puts the practices of e-commerce platforms and physical marketplaces in the spotlight and creates a conversation around how these markets can improve their intellectual property practices.”

The Notorious Markets list identifies marketplaces that purportedly engage in and facilitate substantial copyright piracy and trademark counterfeiting. AAFA focused this year’s submission on foreign and domestic e-commerce platforms. Facebook and other social media companies have also come under fire of late for allowing false and misleading information on their sites, standing beyond First Amendment rights.