In early June, the ASA announced that it would name and shame individual social media influencers who had not disclosed when their Instagram posts were actually advertising. The influencers Chloe Ferry, Chloe Khan, Jodie Marsh and Lucy Mecklenburgh are currently listed on the website for violating the confidentiality rules and will stay there for three months. If they continue to break the rules, the ASA states that it will impose further sanctions, including working with social media platforms to remove their content.
The ASA’s move follows a report made in March that shows that only 35% of Instagram stories were clearly labeled as advertising, despite the fact that it is required by law.
There is also an ongoing investigation by the House of Commons Digital, Culture, Media and Sports Committee into the power of social media influencers and whether tighter regulation of their activities is needed.
These steps show that there is still a need for influencer agreements with brands and social media templates to help out how content is produced and published. Linked to this is the increased use of social media to promote counterfeit products and the need to research technology to combat counterfeit sales online.
Risks and Opportunities
Brands are trying to leverage the trust and power influencers have over their followers. A 2019 survey by marketing service provider Rakuten Marketing found that four out of five consumers made an influencer-recommended purchase by clicking a link or picture shared on social media.
Social media platforms are also recording steadily increasing advertising income, and platforms such as Instagram have introduced their own shopping options.
The attraction of social media extends across the entire range of goods. Last year, TikTok announced a Fashion Month that saw luxury designers like Saint Laurent, Prada and Louis Vuitton come together to put on runway shows.
Counterfeiters have also recognized the power of social buying platforms. A 2019 study identified 56,769 fake accounts active on Instagram; growth of over 171% compared to 2016. Luxury fashion brands are the biggest target, with the top five brands cited by counterfeiters being Gucci, Louis Vuitton, Chanel, Balenciaga and Dior. In fact, Louis Vuitton, Chanel and Gucci together made up over half of the counterfeit fashion items available on Instagram.
These fake accounts published more than 64 million posts and around 1.6 million stories a month. The Stories feature is especially popular as it disappears after 24 hours, making it difficult to find and fight counterfeiters.
Counterfeits lead to a loss of sales for brands and also damage their reputation; Research for the anti-counterfeiting organization Incopro found that 52% of consumers believe that buying a counterfeit leads to a loss of brand trust.
Influencers are often paid to promote fake items and on occasion they also use social media and their own websites to sell fakes directly to their followers. Last November, Amazon launched proceedings against 13 defendants, including two influencers, allegedly promoting and facilitating the sale of counterfeit luxury goods on its website.
Other influencers will advertise counterfeit goods without considering the consequences, for example sending counterfeit goods as gifts.
Brand loyalty with influencers
If influencers do not sell in accordance with the rules, this can damage the reputation of everyone involved. Consumer law requires influencers who are paid or rewarded to endorse a brand on their social media to disclose that they have been paid or animated. However, highlighting posts as advertisements can undermine the natural style of influencer selling and that trusting relationship.
A 2019 investigation by the Competition and Markets Authority (CMA) into whether consumers were misled by influencers who fail to ensure ads are properly identified as such was followed by joint guidance with the ASA to encourage influencers, brands and companies to do more Demanded transparency.
When working with an influencer, brands want to make sure they choose a personality with a style and personality that aligns with the company’s ethos.
Influencer agreements will be essential in regulating the relationship between brand and influencer and will cover important areas of brand protection such as: For example: not to make claims about the qualities of a recommended product; Performing tasks in accordance with the relevant codes and CMA guidelines; and termination of any association with the Brand upon termination of the relationship.
Social media guidelines will also be crucial to ensure a successful collaboration. These should include template posts and measures to make it clear that posts are advertising and clearly reveal the relationship with the followers. This can vary depending on the social media platform.
General problems with online police fakes
There are other challenges related to combating the sale of counterfeit goods online. It is easier to deceive a consumer who has only seen a picture of a particular item, and the younger audience may not necessarily be convinced that counterfeiting is morally wrong. These attitudes are arguably confirmed by influencers who promote and support counterfeit products on their accounts.
Technology that tracks buying habits also takes advantage of connectivity between social media and web browser apps and sites, and monitors a consumer’s interactions with each. Some of these technologies can be manipulated to track an authentic purchase all the way to the point of sale and then spam the user with counterfeit discounts to trick them into abandoning their legitimate purchase.
This technology is based on window shopping habits (adding items to your cart rather than checking out); and a willful ignorance of what the privacy settings are doing in the background.
The automatic profiling settings built into social media accounts allow the use of personal data so that ads can be tailored to an individual’s preferences. While this can come in handy, the reach of this technology extends beyond a user’s movements on their favorite social media sites by using code that collects data about which websites a user has visited. An identifier is associated with this code to determine which advertisements are shown to a user.
Business users can set up this code to “trigger” when someone takes an action on their website, such as: B. puts a product in a shopping cart. The code then allows users to further reach these customers through ads served through social media.
Not all of these ads are generated by human-created and human-managed accounts; some are generated or managed by automated software or bots. Whether counterfeiters use bots to exploit this data collection code is unknown, but bots are certainly used by counterfeiters to increase the visibility of their products. It has been estimated by researchers that there can be up to 95 million bots posing as real accounts on our favorite social media sites.
Social media providers work hard to get fixes in place, but counterfeiters are often one step ahead. However, the speed at which brand surveillance software is evolving offers some hope.
The technology used by brand enforcement teams, which tracks infringers on online marketplaces and fake websites, and automates the sending of opt-out notifications, could well be used to track fraudsters’ abuse of online activity tracking codes and other automated profiling technologies.
One solution could be for brands and social media platforms to team up to address these difficult problems. Their collective insights can turn the tide in the ongoing battle against online counterfeiting.
Katy Bourne and Bella Phillips are intellectual property experts at Pinsent Masons, the law firm behind Out-Law. A version of this article originally appeared in Intellectual Property Magazine.
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