Instagram and the counterfeiting problem

Finding counterfeit goods is easy on Instagram.

The platform, which offers a simple and fun way to share photos and videos, has evolved into a marketing tool. It’s used by legitimate brands and entrepreneurs as part of their marketing strategy, but it’s also exploited by sellers offering counterfeit goods. This is particularly true for luxury goods such as shoes, belts, handbags and clothes.

Selling counterfeit goods is illegal on Instagram. Yet, as first reported on NBC News, according to a recently released report by data analysis firm Ghost Data, groups of organized criminals promote counterfeit luxury products on Instagram, making it “the top showcase platform for counterfeiters” on the web.

The Ghost Data research team found that there were not only more counterfeit accounts than before, but that they have also become more active.

The social nature of the platform allows users, illicit sellers included, to post ads and images of counterfeit products and promote them, making online brand protection difficult. The research emphasizes the fact that those sellers operate openly, and are selling worldwide. Hashtags such as #Replica and terms such as “cheap” are used for counterfeits, making it easy to search, find, and purchase fake luxury goods.

In fact, the Instagram platform allows for counterfeit businesses to offer their goods to the world just like trademark owners and legitimate businesses do. Instagram users can add the names of counterfeited brands in hashtags. Therefore, searching the hashtag of your coveted brand, you may be exposed to both fake and genuine goods.

Currently, in most cases, Instagram is not where the purchase takes place. This means other tech companies are involved in the illicit trade. For example, sellers on Instagram can connect with buyers via WhatsApp, and may take payments via WeChat, PayPal, and others.

In 2019, Instagram launched “Checkout with Instagram”, a feature allowing users to go from inspiration to purchase. Making in-app purchases, instead of sending customers to each company’s online store to make a purchase, is a step towards Instagram becoming an eCommerce sales channel. This is expected to yield higher conversion rates as the users’ payment information will be saved by Instagram, enabling instant purchases rather than users having to sign up with each individual brand.

This eCommerce feature is currently available to selected brands only, but it’s expected to be made available to more brands over time. The report says, “The online sale of counterfeit products and fake luxury goods has grown to a multi-billion dollar underground economy particularly eager to exploit Instagram’s success and features,” and illicit sellers are expected to look for ways to exploit this new feature.

As NBC reported, a spokeswoman for LVMH, the parent company of luxury brands including Louis Vuitton, Christian Dior, and others said, “Brand owners cannot remain the only ones taking action to chase online counterfeiters. As the level of infringement on Instagram and other channels increases, their efforts should be focused on strengthening actions to track, block and remove online listings and promotions for counterfeit goods.”

As the threat of counterfeits becomes more widespread, simply waiting for Instagram and other platforms to find effective solutions is harmful to brand owners. If you’re wondering how to protect your intellectual property online, using an online brand protection company is an easy and effective solution.

Wiser Market is an anti-counterfeit agency offering proactive online brand protection strategy and services to help brands enforce their intellectual property rights, on Instagram as well as all other online channels.

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