Overview
Social media has changed the way the world communicates. The growth of certain individual platforms, such as Instagram and TikTok, has directly impacted the global economy. Indeed, social media has become an online marketplace inundated with content creators and influencers who utilize calculated marketing techniques to gain public recognition and financial opportunities. While the expansion of the social media marketplace has brought about many impressive contributions to society, it has also directly contributed to the facilitation of illegal activity as it pertains to counterfeit (or “dupe”) products. Influencers who promote counterfeit goods, such as handbags and wallets, have been termed “dupe influencers.”
The social media marketplace has rapidly expanded how consumers are presented with counterfeit goods daily. In the past, consumers typically understood when they were purchasing counterfeit goods. For example, consumers would purposefully visit street vendors in specific neighbourhoods notorious for selling inauthentic goods. The issue today is that counterfeit goods are promoted to consumers through trusted influencers on a near-daily basis through social media marketplaces, making counterfeit goods much more visible and accessible to consumers. Dupe influencers are financially incentivized to promote counterfeit products by way of an increased following due to the popularity of their posts, and possibly commissions on sales driven by their posts. Influencers find counterfeit goods through their research, network of other influencers, or direct outreach by companies selling them. Influencers then provide a link via their social media profiles for consumers to purchase counterfeit goods. Often, an influencer will post pictures or videos directly comparing an authentic product with an inauthentic product to demonstrate how “good” the “dupe” product is (i.e., how likely the counterfeit product is to pass off as the authentic product).
A recent trend in the social media marketplace is for influencers to promote counterfeit designer goods sold on DHgate, an e-commerce platform based in China. TikTok has begun to flag and take down videos that mention DHgate for violating community guidelines (i.e., promoting trademark infringement). Even further, after noticing that many content creators were utilizing the hashtag “#designerdupe” to promote these counterfeit products, TikTok banned the hashtag from the platform. However, TikTok users often find workarounds to the community guidelines. Many users have even started using the term “the fence” or the hashtag “#fencefinds” when referring to counterfeit products purchased on DHgate to evade TikTok’s enforcement mechanisms.
The current legal framework in the U.S. for combatting the counterfeit goods market holds direct producers and sellers liable, while other contributory platforms and individuals involved are not typically held liable. Tiffany (NJ) Inc. v. eBay Inc., Civ. No. 08-3947 (2d Cir. 2010) established the principle that while selling platforms bear some responsibility for allowing counterfeit goods to be sold, trademark owners themselves bear the ultimate burden of protecting their goodwill by policing counterfeit items sold in online marketplaces. As a precautionary measure, most online marketplace platforms take some actions to monitor and remove counterfeit goods. Social platforms such as TikTok, Facebook, and Instagram explicitly prohibit content promoting counterfeit products and provide report forms for trademark owners to utilize to remove the infringing content. However, the ultimate burden of trademark policing and enforcement rests on trademark owners.
Historically, street vendor raids may have proven an effective enforcement mechanism for counterfeit goods sold person-to-person, but no such mechanism exists online. Because of the evolving nature of the social media marketplace, enforcement mechanisms are, and will likely continue to be, a few steps behind. Social media platforms may attempt to remain updated with policies, but even their most modern policies must catch up to user workarounds. The new INFORM Consumers Act enacted by the Federal Trade Commission, effective June 2023, should encourage social marketplace platforms to take a step in the right direction. One of the paramount purposes of the Act is to deter the sale of counterfeit goods by increasing transparency in online marketplace platforms. See INFORM Consumers Act of 2023, 15 U.S.C. § 45(f).
Professionals
Sara Gruber
Associate
Emily Rice
Associate
